The Australian Competition and Consumer Commission has filed an appeal against the recent decision by Justice Nicholas of the Federal Court in relation to certain advertisements appearing on Google’s website.

The ACCC alleged that Google had engaged in misleading or deceptive conduct by publishing these advertisements on Google’s search results page where a headline of the advertisement comprised a business name, product name or web address of a business not sponsored, affiliated or associated with the advertiser. When a user clicked the words in the heading of the advertisement associated with the competitor's business or product, he or she was taken to the advertiser's website.

Justice Nicholas found that although a number of the advertisements were misleading or deceptive, Google had not made those representations. Google merely communicated representations made by the advertiser. As such, Justice Nicholas ruled that Google had not breached the Trade Practices Act.

The ACCC appeal to the Full Federal Court is in respect of four advertisements. Justice Nicholas found that Google would have been unable to show that it had no reason to suspect that publication of these advertisements was a breach of the Act. The ACCC considers that the Full Court may find that Google made the representations in question and find Google directly responsible for the publication.

The ACCC takes the view that Google’s key word insertion system, plus the role of Google staff, were fundamental to the representations being made.

It is significant that the previous Federal Court decisions considered by Justice Nicholas related to publishers of advertisements in traditional forms of media, such as print and television. The reasoning in those cases is not easily translated to the practices of search engine providers such as Google in publishing sponsored entries as part of search results.

“The role of search engine providers as publishers of paid content needs to be closely examined in the online age. Specifically, it is important that they are held directly accountable for misleading or deceptive paid search results when they have been closely engaged in presenting and publishing those results.” ACCC chairman Rod Sims said.

It is estimated that online search advertising in Australia through search engines such as Google, is currently worth around $830 million per year. Google is the dominant search engine provider and player in the Australian market. Online advertising grew around 20% in the last financial year.

“It is very important that the law in this area is clarified and fully understood,” Mr Sims said.