Google has been cleared of charges that it failed to adequately distinguish paid search ads from organic search results.
Australia’s High Court ruled that Google didn’t engage in misleading or deceptive conduct because Google didn’t create the ads.
“Google did not create the sponsored links that it published or displayed,” according to the ruling. “Ordinary and reasonable users of the Google search engine would have understood that the representations conveyed by the sponsored links were those of the advertisers, and would not have concluded that Google adopted or endorsed the representations. Accordingly, Google did not engage in conduct that was misleading or deceptive.”
The Australian High Court’s ruling overturns a Federal Court ruling from last April, which found Google guilty of engaging in misleading and deceptive conduct in four cases between 2005 and 2008 – based on a prior court decision that found a television broadcaster guilty for running a deceptive ad.
Watchdog group the Australian Competition and Consumer Commission filed this first-of-its-kind lawsuit against Google in 2007.
Among the ACCC's complaints: when users searched for “Honda”, Google displayed sponsored links (which were renamed "ads" in 2010 – although "sponsored" product ads have since been added to Google's search results) that appeared as though they would take users who clicked on them to Honda.com.au. Instead, clicking on the ads took users to the CarSales website.
“This is a benchmark case in both Australia and internationally in respect to online advertising practices and the responsibility of website hosts for third-party content,” Colleen Platford of Gilbert + Tobin Laywers, Google’s attorneys, told Bloomberg in an e-mailed statement.
It's also interesting to note that, as Glenn Gabe pointed out in "Insights From 7th Graders About Google, Smartphones, Panda, Privacy & Paid Search", many students (who are heavy Google users) don't understand the difference between paid and organic results.