Google wins AdWords case in Australia High Court

In today’s Google vs Australian Competition and Consumer Commission decision, the High Court found that Google was merely a publisher and not the author of any of the advertisements in its AdWords programme, which creates sponsored links based on the user’s internet search.

If the user enters a search term for a company or product name, the advert would sometimes be that of a competitor. The content and text accompanying the sponsored link is written by the company advertising on Google.

The Australian Competition and Consumer Commission (ACCC), a government watchdog, alleged that Google violated section 52 of the Trade Practices Act 1974, which states that “[a] corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive”.

The trial court found that some of the advertisements were misleading but that Google merely communicated the advertisers’ representations. On appeal, the Full Federal Court reversed, finding that “Google’s conduct cannot fairly be described as merely passing on the statements of the advertiser for what they are worth”.

The High Court reversed the Full Federal Court’s decision, stating that “Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by advertisers.”

The ACCC had argued that through its keyword-matching technologies, Google had produced the misleading advertisements. The High Court rejected this argument stating that even with Google’s keyword technology, “[t]he automated response which the Google search engine makes to a user's search request by displaying a sponsored link is wholly determined by the keywords and other content of the sponsored link which the advertiser has chosen. Google does not create, in any authorial sense, the sponsored links that it publishes or displays.”

The High Court emphasised that the decision does not go into whether the four underlying adverts in these cases were themselves misleading, but only whether Google’s conduct violated section 52.

Gilbert + Tobin represented Google, while Corrs Chambers Westgarth represented the ACCC.

Last year, software maker Rosetta Stone sued Google in the US, alleging that the AdWords programme infringed its trade mark. The companies eventually settled the dispute.