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James Thomson is the editor of BRW. Previously he was editor and publisher of SmartCompany and a senior editor at Business Spectator. He writes regularly on Australia's wealthiest entrepreneurs and has deep expertise in small business and the mid market.

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Google wins High Court appeal over search ads

Published 06 February 2013 11:49, Updated 26 November 2013 18:35

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Google wins High Court appeal over search ads

In a case watched around the world, the High Court has ruled Google can’t ‘be held responsible for the conduct of its advertisers’. Photo: Reuters

Internet giant Google has won a High Court victory against the Australian Competition and Consumer Commission, with the court overturning a previous judgment that Google should be held liable for misleading ads served through its AdWords platform.

The case centred around advertisements Google ran on its search pages. Competitors of companies such as Harvey World Travel, Honda, Alpha Dog Training and Just 4x4s magazine had paid for the ads.

Between 2006 and 2008, STA Travel, CarSales, Ausdog and the Trading Post sponsored the ads, which were triggered when users searched for their rivals.

A search for Harvey World Travel, for example, would bring up a paid search result through Google AdWords for STA Travel. A search for Honda would bring up a paid search result for Trading Post.

Google won the ACCC’s initial challenge in the Federal Court, but the ACCC successfully appealed to the full bench of the Federal Court.

“Google did not merely repeat or pass on a statement by the advertiser: what is displayed in response to the user’s search query is not the equivalent of Google saying here is a statement by an advertiser which is passed on for what it is worth,” the full court said in its judgment.

However, that decision has been overturned, with the High Court ruling that Google could not be held responsible for the conduct of its advertisers.

“Google did not create the sponsored links that it published or displayed,” the court said.

“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.

“Accordingly, Google did not engage in conduct that was misleading or deceptive.”

It’s an important victory for Google, which has a core philosophy that it cannot be held for responsible if its search engine points to problematic content.

The ACCC and Google are yet to comment.