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ACCC takes Google to court on misleading and deceptive advertising
World First

 8:16 am on Jul 12, 2007 (gmt 0)

These guys will run an interesting case - they frequently take on the big names in the region such as oil companies, airlines and telco's and multi nationals with the support of legislation behind them or capacity to change legislation - not that this might go that far. It'll be interesting to see how this pans out :

Australia's consumer watchdog has launched a world-first court action accusing internet giant Google of misleading web users by misidentifying sponsored links on its search engine.

The Australian Competition and Consumer Commission (ACCC) said it wanted Google to stop publishing search results that fail to distinguish between paid advertisements and "organic" search results.

The ACCC said the case arose in 2005 when Google's search engine listed two car dealerships from the New South Wales city of Newcastle as sponsored links, which are paid for by companies to attract Internet users.

However, the links fed through to the website of a rival to the dealerships, the classifieds magazine "Trading Post", which competes with them for automotive sales.

"The ACCC is alleging that Google, by failing to adequately distinguish sponsored links from 'organic' search results, has engaged in and continues to engage in misleading and deceptive conduct," the regulator said in a statement.



Robert Charlton

 8:47 am on Jul 12, 2007 (gmt 0)

Ironic that they picked Google, considering that Google was the first engine to take pains to clearly distinguish ads from organic results, at least in the US. At this point, to my eyes, all of the engines appear to be doing a reasonably decent job of labeling the ads.

Is Google doing something different in Australia?


 9:12 am on Jul 12, 2007 (gmt 0)

I don't think so. It seems the ACCC want to test some the local Trade Practices Act out, which they strongly supervise as the country's watchdog regulator - they do have teeth and make life difficult at times for corporates - often with executives being personally liable, as in price fixing or repeated infringements. But i sense they haven't done their homework on this one, as similar cases have been brought elsewhere such as in France, despite the claim of a World first.

I recall some issues of trademark or name infringements, which has a similar ring about it. But it's been hard to regulate effectively from what i can see, despite Court Orders.

The chief executive of Australia' Internet Industry Association, Peter Coroneos [iia.net.au], said the regulator shoud have consulted the industry before taking Google to court.

"It's very unfortunate that the ACCC has decided to pursue a litigious strategy against one participant, rather than consulting more broadly on an issue that affects the entire industry," he said.

Many of the legal minds are way behind the understanding of folks like Google, which makes it hard to win these battles, let alone enforce the actions, which is often more complex.

However, in Australia , often the ACCC undertakes actions as a political device to give the public the impression business is fair and democratic. [ btw - that's rubbish as a monopoly is not illegal in the Australian region! ]

[edited by: Whitey at 9:16 am (utc) on July 12, 2007]


 11:46 am on Jul 12, 2007 (gmt 0)

Google Inc., owner of the world's most-used Internet search engine, is being sued by the Australian government on allegations that advertising links on its Web site mislead consumers.

The search company is accused of displaying links to the Web site of Trading Post Australia Pty Ltd. that included the names of two rivals of the online retailer, suggesting a business relationship existed when there wasn't one, the Australian Competition and Consumer Commission said today in a statement on its Web site. The Federal Court in Sydney will begin hearings on the case on Aug. 21, the regulator said.

Google Is Sued By Australian Regulator for Misleading Links [bloomberg.com]


 12:10 pm on Jul 12, 2007 (gmt 0)

The statement on the ACCC web site [accc.gov.au] clarifies that there are two distinct issues:

  1. Trading Post used its competitors' names in ads
  2. Google does not expressly distinguish advertisements from organic search results

As for #2: IMHO that only goes for visually impaired users.


 12:14 pm on Jul 12, 2007 (gmt 0)

I don't really understand how this isn't an issue between the car dealerships and Sensis/Tradingpost. What's the ACCC got to do with it? And what has the distinguishability (is that a word?) of paid vs. organic got to do with what is, at the base of it, a trademark/passing off issue?


 12:18 pm on Jul 12, 2007 (gmt 0)

"As for #2: IMHO that only goes for visually impaired users."

Interesting... Is there a problem in Australia.. Color Blindness? Maybe.. or too much beach sun :-)

I think they are one of the few, who actaully label the Sponsored results as ADS.

Misleading links is failure of their internal systems but the second point is laughable.


 12:37 pm on Jul 12, 2007 (gmt 0)

Another instance of ACCC trying to justify it's existence. Maybe Kevin Rudd's plan to allow them to monitor food pricing will provide them a more worthwhile cause (if he gets in!). They haven't really got any where with Telstra so i don't think Google should have too much cause for concern on this pathetic stab at something they obviously just don't get! [No colour blind issues in Australia unless you work for the....]


 2:19 pm on Jul 12, 2007 (gmt 0)

"I think they are one of the few, who actaully label the Sponsored results as ADS."

Not here in the UK they don't. In the left hand column there's a small heading saying "sponsored links" tucked into the right hand corner then three ads before the search results. The only identifying feature that differentiates the ads from genuine search results is (a) the ads are at the top and (b) the lines of text for the ads are slightly longer. The right hand column is also headed "sponsored links". I'm frankly amazed that our own Trades Descriptions people have not taken this up before now. Maybe the display is different in the USA?


 2:32 pm on Jul 12, 2007 (gmt 0)

The problem here is that people are bidding on trademarks. They are combining that issue with the user confusion between organic/sponsored.


 6:06 pm on Jul 12, 2007 (gmt 0)

Well, it really should be made more obvious. Out of the last 10 people I've explained PPC to, all 10 didn't realize the results on the right were paid or any different than the organic serps. And we wonder why their eCPMs are so much higher than traditional banners?


 10:09 pm on Jul 12, 2007 (gmt 0)

Well, it really should be made more obvious. Out of the last 10 people I've explained PPC to, all 10 didn't realize the results on the right were paid or any different than the organic serps.

I've got an editorial travel-planning site, and a surprising number of my readers think I'm running a national tourist office or a cruise line. (I even get job inquiries from cruise-industry officers who've read a review of the S.S. WIDGET and think I'm hiring.) Google could have THIS IS A #*$!ING AD, STUPID! in big black letters above every sponsored link, and a lot of people still wouldn't get it.


 10:12 pm on Jul 12, 2007 (gmt 0)

Google could have THIS IS A #*$!ING AD, STUPID! in big black letters above every sponsored link, and a lot of people still wouldn't get it.

I hear ya, we have a form, that on a regular basis, comes back to us with " ...I entered this here because I couldn't find where to put my comments."


[edited by: Gibble at 10:12 pm (utc) on July 12, 2007]


 1:31 pm on Jul 13, 2007 (gmt 0)

It is true that many peopledo not know thedifference between sponsored ads and results.

No measure can improve this problem...as we always would have a chunk of less internet literate population....

But as usual ozzies areup to making a mountain of molehill...


 11:57 pm on Jul 14, 2007 (gmt 0)

If the case doen't have legs, it won't go forward in it's pre hearing.

Again, i think it will be intersting to observe.

From my standpoint, I'm interested to see how Google handles it's very great exposure to global legal scrutiny and challenges. I believe it will handle it well, but media / information control is a hot topic in most regions.


 8:19 am on Jul 16, 2007 (gmt 0)

The crazy part is that Google's treatment of TRADEMARKS, outside of the US & Canada, (i.e. their policy which applies in Australia) actually allows a trademark owner to prevent other advertisers from using the trademark term as a trigger word to display an ad. See [google.com...]

The biggest can of worms is this part:

The ACCC is seeking:
....injunctions restraining Google from publishing sponsored links of advertisers representing an association, sponsorship or affiliation where one does not exist


How does the ACCC expect anyone to know which businesses have 'association, sponsorship or affiliation"?

What next - will classified advertisers be able to sell a second hand car using the brand name of the vehicle? After all - many used car dealers have no affiliation with the car's manufacturer....


 3:56 am on Jul 18, 2007 (gmt 0)

Valid case IMO...deceptive misconduct = deceptive misconduct.

A good article to help better understand the ACCC.

On the question of competitors buying each others' names, Google says it does not monitor this and, given the billions of searches going on every day, it would be impossible to do so.

Google then shoots its own argument down by referring to its AdWords Trademarks Complaint Procedure, which allows a business to apply to have its trademark protected from competitors buying it.

Obviously if it was impossible to monitor these things, then this procedure would not work, either.

In any case, the complaint procedure is only available on google.com, not google.com.au. And it's buried deep under "about Google", then "contact us" there are no signposts how to get there. It's fair to say, no one would find this unless they were told where it was.

And who can blame Google? Competitors bidding against each other at auction to buy their own names as well as each others' names is no doubt a big part of the company's revenue. Yes, but is it fair and reasonable?

I would certainly prefer not to be competing against my newsletter competitors for the name Alan Kohler, although that is a rather self-interested view, and I think the fact that they are sponsored links could be made a bit clearer.

The system of sponsored links is based on a 2002 US Federal Trade Commission ruling.

Now the Australian regulator has asked Federal Court of Australia judge James Allsop to update this US ruling. Should be fascinating.

[edited by: Web_speed at 4:02 am (utc) on July 18, 2007]

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