The Australian Competition and Consumer Commission (ACCC), the Australian Government’s consumer watchdog, is suing Google Inc, Google Australia and Google Ireland for misleading and deceptive conduct due to deceptive Adwords ads presented next to Google search results.
The ACCC alleges that sponsored links naming car dealerships appeared on Google that took users to the website of The Trading Post, a popular weekly classifieds newspaper owned by Australia’s largest telecommunications company Telstra.
The ACCC is suing on two grounds; that Google, by allowing the ads to be placed, engaged in misleading and deceptive conduct in breach of section 52 of the Trade Practices Act, and that Google, by failing to adequately distinguish sponsored links from “organic” search results, has engaged and continues to engage in misleading and deceptive conduct also in breach of section 52 of the Act.
According to local media reports, Google Australia spokesperson Rob Shilkin said that Google believes the claims are without merit and will be defended vigorously.
This isn’t the first case worldwide where Google has had to defend itself against allegations such as these. So far Google has been successful in its defense against individual actions in the United States, however, this would likely be the first case where Google has been challenged at this level by a Government body. Trade practices laws in Australia are stronger than similar laws in the United States, so this isn’t a case in which Google will be assured a win.
The action will come before the Australian Federal Court in Sydney August 21.