Google not liable for misleading and deceptive advertisements

In Google Inc v Australian Competition and Consumer Commission ([2013] HCA 1, February 6 2013), the High Court of Australia has held that Google did not engage in misleading or deceptive conduct merely by publishing misleading search results that were generated by an advertiser’s wrongful use of certain keywords as Google AdWords.

These proceedings commenced in July 2007 when the Australian Competition and Consumer Commission (ACCC) initiated proceedings against Google in relation to certain search results published by Google. The ACCC alleged that the results were generated by Google’s search algorithms and conveyed misleading and deceptive representations in contravention of Section 52 of the Trade Practices Act 1974.

The search results were "sponsored links" (advertisements created by, or at the direction of, advertisers who pay Google for advertising text which directs users (usually) to the advertiser's website). It was not disputed on appeal that the sponsored links in question conveyed misleading and deceptive representations as the result of the advertiser’s wrongful use of third-party trademarks or brand names as keywords (Google AdWords). Instead, the appeal focused on whether Google (as distinct from the advertisers) engaged in misleading and deceptive conduct by publishing or displaying the sponsored links.

At first instance, the primary judge dismissed the ACCC's application on the basis that Google itself had not made the misleading and deceptive representations (instead finding that it was only the advertiser - that is, the owner of the AdWord, that had misled or deceived the public). Importantly, the judge found that Google had acted merely as a conduit, passing on the advertisements of others without endorsing or approving them.

The Full Court of the Federal Court subsequently allowed the ACCC's appeal and declared that Google had contravened Section 52 of the act by publishing the search results. The significant point of distinction between the Full Court and the primary judge was that the Full Court thought that Google, by applying its search algorithms to the search request, had itself created the results that it published. Accordingly, in these circumstances, Google was more than a “mere conduit” and its conduct was as a “principal”.

The High Court has now overturned the Full Court’s decision. For the reasons set out below, the High Court held that Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by certain advertisers and therefore did not contravene Section 52.

The court stated that the question of whether the publication of a misleading representation is itself misleading or deceptive conduct will depend on whether “it would appear to ordinary and reasonable members of the relevant class that the [publisher] has adopted or endorsed that representation”. 

The factors that the court considered relevant in deciding this question included the following:

1. Google had no control over a user's choice of search terms or an advertiser's choice of keywords.
2. Even with the facility of keyword insertion by the user, the advertiser is the author of the sponsored link because each relevant aspect of a sponsored link is determined by the advertiser.
3. The automated response that 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 that the advertiser has chosen.
4. Google did not create, in any authorial sense, the sponsored links that it published or displayed.
5. The fact that the display of sponsored links can be described as Google's “response” to a user's request for information does not render Google the maker, author, creator or originator of the information in a sponsored link. 
6. The technology that lies behind the display of a sponsored link merely “assembles information” provided by others for the purpose of displaying advertisements directed to users of the Google search.
7. Each sponsored link appeared under a heading ‘Sponsored Links’, indicating that the content was a statement made by the advertiser, not by Google.

In essence, the court considered that Google was not relevantly different from other intermediaries, such as newspaper publishers (whether in print or online) or broadcasters (whether radio, television or online), who publish, display or broadcast the advertisements of others.

In relation to the primary judge’s original findings, the court stated as follows:

“These findings - that ordinary and reasonable users would have understood the sponsored links to be statements made by advertisers which Google had not endorsed, and was merely passing on for what they were worth - were plainly correct.”

This decision is clearly good news for all online (and traditional) publishers of third-party content (including business such as travel agents, real estate agents and social media platforms that 'host' such content) because it now seems clear that merely providing the technology (or the platform) to enable third parties to create or display their content is not of itself a contravention of the act.  

However, it should be noted that this decision was based on the particular circumstances of this case - importantly, the evidence as to the minimal level of involvement of Google in authoring or creating the content of the sponsored links. Publishers that engage in a greater level of involvement in the content of an advertisement may not be able to rely on this decision.

Julian Gyngell, Kepdowrie Chambers, Wahroonga