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Sensis settles with ACCC, Google takes dock in June

Sensis has settled with the Australian Consumer and Competition Commission (ACCC) regarding a number of alleged breaches of the Trade Practices Act, committed online by its classified advertising publication The Trading Post.
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Written by Marcus Browne on

Sensis has settled with the Australian Consumer and Competition Commission (ACCC) regarding a number of alleged breaches of the Trade Practices Act, committed online by its classified advertising publication The Trading Post.

Allegations against The Trading Post and its parent company Sensis — itself a Telstra subsidiary — arose in 2005 when the ACCC began an investigation into claims that Sensis had adjusted The Trading Post's online advertisements so they would attract people searching Google for Newcastle car dealerships Kloster Ford and Charlestown Toyota.

The investigation found enough validity in the claims to launch legal action in July last year.

Sensis announced the closure of legal proceedings today after it accepted that The Trading Post's online marketing had contravened sections 52 and 53(d) of the Trade Practices Act.

"Sensis and The Trading Post are pleased to have worked through these issues with the ACCC and to have come to a resolution that we believe is in the best interests of Internet users and advertisers," said Sensis' general counsel Niki Hantzis.

"As the first case of its kind in Australia, it has given us the opportunity to subject our internal policies and processes, many of which we put in place in 2005, to a comprehensive review," she said.

In reaching the settlement, The Trading Post agreed with the court's findings that by using the names "Kloster Ford" and "Charlestown Toyota" as part of its sponsored links agreement with Google, it duped users into believing that by clicking on the links they would be taken to a Web site associated with the car dealerships.

However, users clicking on the links were actually forwarded to The Trading Post Web site, which contained no information about the dealers — both of which competed with the classifieds publication in automotive sales at the time.

As part of the settlement, The Trading Post and Sensis will no longer include known business names in their search engine advertising — unless information about those businesses or their products can be found on the site.

"We are now confident we have very strong compliance measures in place and the search engine marketing industry as a whole also has a much clearer view of what is considered acceptable practice," said Hantzis.

A spokesperson for Sensis told ZDNet.com.au today that the company was not subject to any financial penalty as part of the settlement.

"A fine was never a part of the legal proceedings as far as I know," said the spokesperson.

The announcement comes ahead of the June hearing date set for Google to answer accusations that it inadequately distinguished between its paid-for sponsored links and the "organic" search results its search engine produces.

Although Google was involved with The Trading Post case as the facilitator of the misleading links, the ACCC's allegations against Google are separate from those settled between the watchdog and the publication at today's hearing — which the search giant was not required to attend.

"We have no comment on Trading Post's undertaking to the ACCC. Google believes that the ACCC's claims are without merit and we look forward to making our case at the hearing," said a Google spokesperson today.

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