Canberra - Google won a landmark court case on Wednesday
when Australia's High Court ruled that it had not engaged in misleading
behaviour with its sponsored links and that it was not responsible for messages
conveyed by paid advertisers.
The ruling helps internet providers and search engines argue
that they are not publishers, but simply carriers of information provided by
While the judgment applies only in Australia, the ruling
will be closely watched around the world and could be cited as a precedent in
the event of similar cases arising in the rapidly evolving area of law.
"Others will definitely be looking at this ruling.
Google is a worldwide business. This is something of a first, and it does add
some clarity for the industry," the head of Australia's Internet Industry
Association, Peter Lee, told Reuters.
The finding ends a six-year legal battle between Google and
Australia's consumer watchdog, the Australian Competition and Consumer
Commission (ACCC), which accused Google of engaging in misleading and deceptive
conduct over paid advertisements.
The ACCC based its case on search results in 2006 and 2007,
where a search for Honda Australia would show a paid advertisement for a Honda
competitor, CarSales. The ACCC said the ads were deceptive, as they suggested
CarSales was linked to Honda.
Google argued that it was not responsible for the
advertisements, as it was only the conduit for the advertiser.
In a unanimous finding, five judges of Australia's High
Court ruled in favour of Google, overturning a ruling from the Federal Court.
The lower court had ordered Google to set up a compliance programme to make
sure paid advertisements on its search engine were not misleading.
The five High Court judges said Google did not create the
sponsored links and the company was not responsible for messages in the links.
"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 court said.
Google issued a brief statement saying it welcomed the
decision, while the ACCC said it would review the judgment to see if it had
wider ramifications for Australian consumer law.
"The ACCC took these proceedings to clarify the law
relating to advertising practices in the internet age," ACCC chairperson Rod
Sims said in a statement.
The legal victory comes after Google and language software
maker Rosetta Stone Inc last year settled a trademark infringement dispute in
the United States over Google advertising practices.
Rosetta had argued people searching for its products on
Google were being directed to competitors and software counterfeiters.
Google has since changed the way it displays its sponsored
links in Australia, now clearly labelling them as advertisements on top of
A Google search for Honda Australia on Wednesday displayed
paid ads for Honda Australia's website.