Google Faces Legal Action from Australian Government

It’s one thing when a company decides to sue Google. Google’s typical “we believe the claims are without merit and we will defend them vigorously” statement, usually sends a strong message that the search engine will bring out the big-guns in defense.

But what happens when the lawsuit is filed by the Australian Government? All of a sudden, we can’t automatically assume Google’s going to be victorious, can we? That’s the scenario Google is facing after the Australian Competition and Consumer Commission – the Ozzie Government consumer watchdog – filed suit against Google for misleading and deceptive conduct in their AdWords ads.

The case also includes the company who’s ads the ACCC is challenging. Here’s an excerpt from the filing:

The ACCC is alleging that Trading Post contravened sections 52 and 53(d) of the Trade Practices Act 1974 in 2005 when the business names “Kloster Ford” and “Charlestown Toyota” appeared in the title of Google sponsored links to Trading Post’s website. Kloster Ford and Charlestown Toyota are Newcastle car dealerships who compete against Trading Post in automotive sales.

The ACCC is also alleging that Google, by causing the Kloster Ford and Charlestown Toyota links to be published on its website, engaged in misleading and deceptive conduct in breach of section 52 of the Act.

Further, the ACCC is alleging that Google, by failing to adequately distinguish sponsored links from “organic” search results, has engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Act.

Google’s faced government action before – remember its battle with Belgium – but this is the first case from a government claiming misleading practices.

Hat-tip TC.