Google sued by the Australian government competition watchdog

Google’s sponsored links and AdWords have caused a wave of litigation throughout the world. At this year’s International Trademark Association (INTA) conference in Chicago there was standing room only at sessions on the topic. Now Australia has joined the fray with the Australian Competition and Consumer Commission suing Google in the Federal Court. While the Federal Trade Commission in the United States has examined similar issues, the ACCC is the first government regulatory body in the world to take action against Google in relation to sponsored links and AdWords.

Sponsored links appear next to Google search results, normally at the top in a coloured beige box or on the right hand side of the page. This has been incredibly profitable for Google but it has also upset many trade mark owners when a sponsored link is used without their permission. While Google does have a Trademark Complaint Procedure, Google will not disable keywords in response to a trademark complaint and will normally only stop advertisers using the identical trade mark.

The ACCC claims Google and The Trading Post mislead consumers and breached sections 52 and 53(d) of the Australian Trade Practices Act 1974 when two sponsored links, Kloster Ford and Charlestown Toyota, directed traffic to the Trading Post rather than the Newcastle car dealerships of the same name. The Trading Post is a classified advertising publication owned by telecommunications giant Telstra which carries pages and pages of advertisements for cars as well as many other products.

The ACCC is seeking the following remedies against Google and The Trading Post:

  • declarations that Trading Post contravened sections 52 and 53(d) of the Act
  • declarations that Google contravened section 52 of the Act
  • injunctions restraining Trading Post from representing through sponsored links an association, sponsorship or affiliation with another business where one does not exist
  • injunctions restraining Google from publishing sponsored links of advertisers representing an association, sponsorship or affiliation where one does not exist
  • injunctions restraining Google from publishing search results that do not expressly distinguish advertisements from organic search results
  • orders that Trading Post and Google implement trade practices compliance programs
  • an order that Google publish a notice on its website outlining the above.

On 4 October 2007 Justice Allsop in the Federal Court dismissed Google’s motion to strike out the ACCC’s statement of claim. Proceedings against the 3rd and 4th respondents (Google Ireland and Google Australia) were discontinued as the parent company of Google, Google Inc, submitted that it was responsible for all representations made on www.google.com.au.  The matter returns to Allsop J for further direction on 16 November 2007.

ACCC press release 4 October 2007

ACCC press release 12 July 2007

Read the Sydney Morning Herald report

ACCC v Google: Tall poppy syndrome on steroids – crikey.com.au

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