An Australian court said that Google engages in “misleading and deceptive” conduct because of the ads it chooses to display. Google was sued last year for misleading its users but a lower court didn’t think Google was liable for what its advertisers do and ruled in favor of Google.
But The Australian Competition & Consumer Commission (ACCC) appealed this decision in the Federal Court and won. This is a major defeat for Google who thought it could get away scot-free but now has to comply with this new ruling.
The issue involves advertisers buying keywords and placing ads using the name of a major competitor. So when a Google search engine user clicked on an ad thinking they were going to be directed to the website of a particular travel agency, they would actually be redirected to its competitor’s website. Google’s AdWords program permitted all sorts of companies to engage in this deceptive act to trick users. These companies bought search terms that returned Google’s sponsored results and redirected users to websites of rival companies.
For example, a company called CarSales bought search terms and ad space from Google. The company’s ad included this headline in their advertisement: “Honda.com.au”. When Google users clicked on that ad they thought they were going to Honda’s website but they were actually redirected to CarSales’ website.
The ACCC’s Chairman, Rod Sims, said in a statement:
“The ACCC brought this appeal because it raises very important issues as to the role of search engine providers as publishers of paid content in the online age,” Sims said. “This is an important outcome because it makes it clear that Google and other search engine providers which use similar technology to Google will be directly accountable for misleading or deceptive paid search results”
Google is upset and “disappointed” by the court’s decision. Obviously, it believes that it’s completely innocent *yawn*. Google is throwing its advertisers under the bus by claiming that it is totally their fault for misleading customers – Google claims that it just gives these advertisers the platform to show their ads and isn’t involved any further.
The Federal Court is forcing Google to pay the ACCC’s court costs and Google must implement a compliance program.
For more information:
The Register, “Google ads ‘misleading and deceptive’” – click here
The Australian, “Google ads ruling hands win to watchdog” – click here
CNET, “Google charged with ‘deceptive’ conduct in search ads” – click here