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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.

  • http://www.lff.com Fitness guy

    This just seems like a normal US style lawsuit with the shotgun effect of suing EVERYBODY who is involved. I don’t think Google is going to be found responsible for Trading Post submitting misleading ads.

  • Tony

    We have very different laws to the usa. We are probably the most over governed country in the world which wouldn’t help. “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.”

    TRADE PRACTICES ACT 1974 – SECT 52
    Misleading or deceptive conduct

    (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

    (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

    Note: For rules relating to representations as to the country of origin of goods, see Division 1AA (sections 65AA to 65AN).

    That is the section in question. Whether or not google wasn’t the advertiser that placed the adverts it doesn’t matter in Australia for they allowed for the adverts to be shown which caused for the misleading/deception to occur.

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  • http://www.australianventure.co.uk/ Australian Property

    That is indeed a clash between two Goliath’s. I wonder how this panned out in the end. I think anybody willing to challenge Google is very gutsy.

    I suppose a government has more law power than a single guy from home.

    Australian Property’s last blog post..Australia’s construction overwhelmed by property demand