ACCC targets Google in Federal Court appeal despite winning original case

The Australian Competition and Consumer Commission is appealing a decision made by the Federal Court last month which exonerated Google from a case that found the Trading Post was using other companies’ names to advertise its own services.

The action indicates the ACCC is keen on making sure businesses it views as responsible aren’t permitted to get away with actions it deems to be uncompetitive, even though it won the original case, as it says this area of the law “needs to be clearly understood”.

The decision to take on Google also raises doubts as to whether SMEs considering engaging an AdWords campaign with other businesses’ names will be able to do so without being spotted by the ACCC. The entire case raises questions over Google’s role in publishing, rather than just being a neutral ad platform.

Reseo chief executive Chris Thomas says businesses thinking about copying that sort of behaviour shouldn’t.

“You can’t do this stuff and expect to get away with it. There are better ways to make a living,” he says, although adds that while advertisers may be able to change ad copy, they aren’t able to change the URLs that appear in ads.

“I think people get confused, but when you set a display URL, you can’t use another URL to direct traffic back to your site. So, perhaps people are just looking at the actual ad copy rather than the link.”

While the court found that Google had not engaged in misleading or deceptive conduct by publishing the ads, the ACCC says that Google had a key role to play in publishing those ads, with chairman Rod Sims arguing that it should have stopped them before they were published.

“The role of search engine providers as publishers of paid content needs to be closely examined in the online age,” he said.

“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.”

The original issue was that the Trading Post was using competitors’ trademarks. If users searched for “Kloster Ford” or “Charlestown Toyota”, they would see ads that brought up links for the Trading Post, even though the site contained no mention of those two businesses.

During the case, the ACCC also showed evidence that other businesses had engaged in similar practices, and now argues that it wants Google to be responsible for publishing those ads as well.

“The ACCC considers that the Full Court may find that Google made the representations in question and find Google directly responsible for the publication,” Sims says, warning that the role of search engine providers as publishers “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.”