Google wins landmark AdWords case in Australia

By Rachel Hand topicIcon PPC

Ads not so bad

The Australian High Court has ruled that Google AdWords is not responsible for misleading content published by advertisers.

The legal battle with the Australian Competition and Consumer Commission (ACCC) began in 2007. The ACCC cited four instances of "misleading and deceptive" advertising, where AdWords advertisers were allowed to bid on competitor trademarks, and piggyback on their brand names. The Federal Court initially ruled against Google in April 2012, a decision which was overturned by five High Court judges yesterday. In a statement, the Court explained:

"Ordinary and reasonable members of the relevant class of consumers who might be affected by the alleged conduct would have understood that sponsored links were advertisements and would not have understood Google to have endorsed or to have been responsible in any meaningful way for the content of those advertisements."

What's in a brand name?

The decision backs up Google's claims to be merely a publisher or conduit of advertising content, which cannot be held responsible for what third parties choose to publish. However, the search giant has previously been keen to provide a high quality service, with a crackdown on 'bad ads' resulting in several million ads and accounts being disabled. Common 'bad ads' have included illegal online pharmacies, ticket scammers, and ads that link to sites containing malware.

Trademark bidding meanwhile is something of a grey area. Google began allowing AdWords users to bid on trademarks in the US in 2009, and the UK in 2010, predominantly to help stockists and retailers of branded products. However, Google has also been sued for trademark infringement in recent years by American Airlines, Rosetta Stone and Interflora. The company has previously argued that in an automated system it is impossible to verify every single ad and bid.

Natalie Booth, head of search at theEword, said: "The decision in Australia has been of interest to the industry as it suggests Google is not responsible for what advertisers choose to publish. Of course, the US Department of Justice must think otherwise as it famously fined Google $500m over Canadian online pharmacy ads. It's still early days for this area of law, so each case attracts a lot of attention."