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Google Cleared By Australia’s High Court In Landmark AdWords Case

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Google won an important court case in Australia on Wednesday when the country’s High Court ruled that the Internet behemoth did not violate fair trade law by allowing companies to purchase AdWords containing their competitor’s names.

Five judges of Australia’s High Court ruled unanimously in favor of Google, overturning a previous ruling from the Federal Court, which had ordered the company to set up a compliance program to make sure paid ads on its search engine are not misleading. The Federal Court had found in 2012 that four advertisements were misleading and breached Australia’s Trade Practices Act 1974. Google appealed the decision, bringing the case to the High Court. The Mountain View-based company had maintained that it acts as a publisher and is not responsible for content by AdWords purchasers.

The High Court’s decisions concludes a six-year-long battle between Google and the Australian Competition and Consumer Commission (ACCC), the country’s fair trade regulator. The ACCC brought the case against Google in 2007, alleging that the Internet giant had sold misleading advertisements allowing companies to purchase competitors’ keywords between 2005 and 2008. The case was triggered by search results in 2006 and 2007, where a search for Honda Australia would show a paid advertisement for a Honda competitor CarSales. The ACCC claimed that such ads linked CarSales to Honda Motor Co. and were therefore deceptive.

In its ruling, the High Court said Google was not responsible for the messages in sponsored links sold through its AdWords advertising platform because it had not created them.

“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,” the High Court said in a news release.

While significant, this case is certainly not the first time Google has been embroiled in litigation over selling AdWords ads triggered by third-party trademarks. Companies that have sued Google include American Airlines, GEICO, and the Rosetta Stone, but Google usually comes out on top in these cases, as Forbes points out.