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19 March 2013 Business owners - take care when buying sponsored links

 


In Brief

This article discusses the much anticipated decision of the High Court in relation to whether Google was liable for misleading or deceptive conduct through its AdWords programme.


In our previous article Google Adwords on Trial: ACCC Establishes Misleading or Deceptive Conduct we discussed the decision of the Full Federal Court, which found that Google was liable for misleading or deceptive conduct as a result of the purchase and use of words associated with a business of a competitor of the Google customer.  That decision has been overturned by the High Court.

To recap, when a user typed into the search engine "alpha dog training" the first sponsored link that user would see would be the heading "alpha dog training" but this link would direct the viewer to Alpha Dog Training's competitor Ausdog.  ACCC claimed that this, and other similar conduct, constituted misleading or deceptive conduct by Google in breach of the Trade Practices Act 1974 (now the Australian Consumer Law).

There is no doubt that the conduct by the advertising business, which purchased the words associated with a competitor business, is engaging in unlawful conduct.  This was again confirmed by the High Court.

However, the High Court determined that Google has no responsibility for the links, or the wrongful association between key phrases and business.  Google merely passes on the information it was provided from the advertiser and was not engaging in any misleading or deceptive conduct.

What this means for business owners

Whilst the decision is good news for Google, it means that users of the AdWords programme (or any advertising programme via a search engine service) must be extra vigilant with the terms that it uses to advertise its goods and services so as to not mislead or deceive consumers, or engage in conduct that is likely to mislead or deceive consumers.  It is important to remember that you don't have to intentionally mean to mislead or deceive consumers in order to be in breach of these provisions.

Without careful scrutiny of the terms used for a programme such as AdWords, business owners could easily fall fool of the consumer protection provisions under the Australian Consumer Law.  This form of reaching out to potential consumers, and promoting your goods or services, is no different to any other form of advertising or marketing communications that you might use, where marketing clearances are a must!

For further information, please contact us.

Co-authored by M Hall.


If you would like to republish this article, it is generally approved, but prior to doing so please contact the Marketing team at marketing@swaab.com.au

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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