(Reuters) – Search giant Google Inc
engaged in “misleading and deceptive” conduct by allowing misleading paid advertisements to be shown with Internet search
results, an Australian court ruled on Tuesday.
The Australian Competition and Consumer Commission (ACCC) said the
ruling meant that not only Google, but other Internet search engines, would now be held responsible for “deceptive paid
search results”.
Google had earlier won a court ruling on the subject, but a full bench of Australia’s Federal Court
on Tuesday overturned that decision on appeal by the ACCC.
In its judgment, the court said between March 2006 and July
2007, Google published search results for queries related to Honda Australia, with results showing paid advertisements for a Honda competitor
CarSales. It said the advertisements suggested CarSales was linked to Honda Australia.
The court said Google should be
responsible for search results and that by publishing the paid advertisements had “engaged in conduct that was misleading or
deceptive”.
“It is Google’s technology which creates that which is displayed,” said the judges, who examined four
cases of misleading search results.
The court ordered Google set up a compliance program to ensure paid advertisements
on its search engine did not mislead consumers, and ordered Google to pay costs for the court action, which has been running
since 2007.
Google had argued it was not responsible for the misleading search results, as it was clear that it was
only a conduit for the advertiser.
Google did not respond to Reuters requests for comment, but told local media
reported that the company was disappointed with the judgment and would consider its options.
The consumer watchdog
ACCC said the ruling was an important decision and would impact all Internet search engines.
“It makes it clear that
Google and other search engine providers which use similar technology to Google will be directly accountable for misleading
or deceptive paid search results,” ACCC chairman Rod Sims said in a statement.
(Reporting By Maggie Lu YueYang and James Grubel; Editing by Michael Perry)