04 Jun 2012
Google found Liable for its Misleading AdWords Search Results
The full Federal Court of Australia recently held that the search engine giant Google Inc. was liable for making misleading or deceptive representations in publishing certain advertisements in its search results in response to user queries.
The advertisements in question were Google’s AdWords sponsored links, which allowed advertisers to use competitors’ names and trade marks as ‘keywords’ in their Google AdWords sponsored links. When a user entered a search term in Google that matched a particular keyword (for example, a competitor’s name or trade mark), the relevant sponsored links containing that keyword were triggered and presented near the top of Google’s search results. When users clicked on the relevant advertisement, they were taken to the advertiser’s website which contained no information about the competitor.
To illustrate the above, assume that a user wants to find the website of Honda and searches for “honda” on Google. The search results are presented with a list of links to various websites including the one that the user is looking for, www.honda.com.au, which is usually expected to be presented near the top of the search results. However, more often than not these ‘organic’ Google search results are preceded by ‘sponsored links’, a list of links for which various advertisers have paid Google to use its AdWords service.
One of the sponsored links considered in this case related to the use of the search term “honda.com.au” by Carsales, an online classified advertiser for the sale of cars, in its AdWords sponsored link/advertisement. The relevant AdWords advertisement generated by Google was:
Honda .com.au www.carsales.com.au/Honda-Cars Buy/Sell Your Civic The Fast Way on Australia’s No.1 Auto Website
Immediately below the sponsored link was the first of the organic search results which consisted of a link to the website www.honda.com.au, a domain name registered to Honda Australia Pty Ltd.
When a user clicked on the “Honda.com.au” link in the Carsales advertisement, the user was taken to the website of Carsales.com.au and not to the website of Honda Australia.
The case was initially dismissed in the Federal Court. It was held that Google was a ‘mere conduit’ for the misleading or deceptive representations of the advertisers. Ordinary and reasonable users of the search engine would have understood the message being conveyed as one from the advertiser, rather than from Google as the publisher.
This decision was overturned on appeal. The Court noted that what appeared on Google’s webpage was Google’s response to the user’s query and so its conduct could not fairly be described as merely passing on the statements of the advertiser. Therefore, Google’s conduct in publishing the advertisements was found to falsely represent a connection or commercial association between Google’s AdWords customers and the competing businesses. Google was ordered to, among other things, implement a trade practices compliance programme.
Google has sought special leave of the High Court to appeal the Full Court's decision which may or may not be granted.
What does this decision mean for me?
- Brand owners now have recourse against the sponsored link advertiser and directly against Google if the sponsored link contains misleading or deceptive representations such as, for example, the name or trade mark of a competitor.
- Search engine providers, internet marketers and potentially publishers of advertising generally, that publish advertisements in response to user queries, should be careful about the manner in which they present content on their platforms, even when a third party has created the content. A failure to do so may result in such organisations being held liable for misleading or deceptive conduct under the Australian Consumer Law.
What should I do?
- Review the use of your AdWords or other sponsored links to ensure that they do not contain any representation that is misleading or deceptive.
- Avoid using competitors’ names or trade marks as keywords for your websites and advertisements.
- Conduct searches on Google and other search engines for your own name or trade mark to check whether the search results reveal your name or trade mark is being used by a competitor or other unauthorised third party advertiser.
- Seek the advice of a qualified IP lawyer if you wish to enforce your IP rights against such unauthorised conduct.
If you have any IP questions or concerns about your business, please feel free to contact me.
This article was written by Senior Lawyer Jimmy Gill, M+K Intellectual Property Team. To contact Jimmy, call (07) 3235 0460, or email firstname.lastname@example.org.