Google cleared by Australia's High Court in deceptive AdWords case

The company did not violate Australian law by allowing companies to use words related to their competitors in advertisements

The High Court cleared Google on Wednesday of violating fair trade law by allowing companies to publish advertisements containing their competitors' names, handing a defeat to the country's fair trade regulator.

The High Court found that Google did not have a hand in creating paid-for sponsored links sold through its AdWords advertising product, through which some companies used competitors' business or product names in headlines.

"Ordinary and reasonable users of the Google search engine would have understood that the representations conveyed by the sponsored links were those of the advertisers, and would not have concluded that Google adopted or endorsed the representations," according to a news release from the High Court. "Accordingly, Google did not engage in conduct that was misleading or deceptive."

The judgement, handed down by the High Court in Canberra, brings an end to a six-year legal battle.

The Australian Competition and Consumer Commission (ACCC), which is responsible for ensuring compliance fair trading and consumer protection laws, brought a case against Google in 2007. It alleged the Internet giant sold misleading advertisements that allowed companies to use words related to their competitors between 2005 and 2008.

The 11 advertisements in question contained business names, product names or web addresses for a competitor which had not purchased AdWords advertisements from Google. AdWords, a key revenue source for Google, allows companies to bid for keywords that triggers ads that are then matched to people's search queries.

In one example, AdWords containing the name Harvey World Travel were purchased by an Australian company called STA Travel, a competing agency. Those who searched for Harvey World Travel saw sponsored links for STA Travel.

In October 2011, a Federal Court judge found that some of the ads in question were misleading but in some instances that Google had only presented the representations of advertisers.

The ACCC appealed. The Full Federal Court found in April 2012 that four advertisements were misleading and breached the Trade Practices Act 1974, ordering Google to put in place a consumer compliance program.

Google appealed that decision, which brought the case to Australia's High Court. Google has maintained it acts as a publisher and that it was not responsible for the content and representations made by AdWords purchasers.

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