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Google triumphs overs the ACCC

Consumer Law News | April 2013

On 6 February 2013 the High Court unanimously allowed an appeal made by Google Inc. ("Google") [Google Inc. v Australian Competition and Consumer Commission [2013] HCA 1] against a decision of the Full Court of the Federal Court. Briefly stated the facts of the case revolve around the publishing by Google of advertising information on its search engine through the use of sponsored links. In bringing the claim the ACCC claimed that Google had been involved in misleading and deceptive conduct, as outlined in section 52 of the Trade Practices Act 1974 (Cth) ("TPA") (now section 18 of the Competition and Consumer Act 2012 (Cth) ("CCA"), by displaying sponsored links on its website that contained false information. In reaching its decision the High Court found that although the advertisements that were the subject of the proceedings contained information that could be construed as deceptive or misleading, this was not the conduct of Google Inc. but that of the individual advertisers.

It is important to note that section 52 of the TPA does not rely on whether there is evidence of an individual having been misled or deceived, only that the information contained in the advertisement is likely to mislead or deceive. A further requirement, in instances where an agent or intermediary has passed on the information, is that the agent or intermediary must be shown as having adopted or endorsed the representation being made. The trial judge found that although the advertisements in question did contain representations which were misleading or deceptive or likely to be so, Google had acted merely as the conduit by passing on the advertisements of others without approving or endorsing them. This being the case, Google was, therefore, not liable under section 52 of the TPA.

The Full Court of the Federal Court overturned this decision on the basis that the technology used by Google in creating the advertising link for the advertiser, including the insertion of search terms, involved it to such an extent in the creation of the link that it was unable to assert that it was merely passing on information. In reversing the decision of the Full Court in favour of the decision at first instance the High Court appears to have reinforced, in principle, the idea that an agent or intermediary that simply publishes third party information that may be misleading, without endorsing or adopting the information, is unlikely to be found to have engaged in misleading or deceptive conduct, although this may not always necessarily be the case.

Forum Law can advise you on the content of your advertising material and in particular we can review your website content to assess compliance with the provisions of the Australian Consumer Law and other legal obligations to which your advertising material may expose your business. Contact Forum Law today.

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