Google Inc v Australian Competition and Consumer Commission

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HIGH COURT OF AUSTRALIA

FRENCH CJ,
HAYNE, HEYDON, CRENNAN AND KIEFEL JJ

GOOGLE INC  APPELLANT

AND

AUSTRALIAN COMPETITION AND CONSUMER
COMMISSION  RESPONDENT

Google Inc v Australian Competition and Consumer Commission

[2013] HCA 1

6 February 2013

S175/2012

ORDER

1. Appeal allowed with costs.

2. Set aside the orders of the Full Court of the Federal Court of Australia made on 3 April 2012 and the orders of the Federal Court of Australia made on 4 May 2012 and, in their place, order that the appeal to the Full Court be dismissed with costs.

On appeal from the Federal Court of Australia

Representation

A J L Bannon SC with C Dimitriadis for the appellant (instructed by Gilbert + Tobin)

S T White SC with K C Morgan for the respondent (instructed by Corrs Chambers Westgarth)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

Google Inc v Australian Competition and Consumer Commission

Trade practices – Misleading or deceptive conduct – Search engine operator displayed "sponsored links" on search results page – Sponsored links created by or at direction of advertisers – Sponsored links comprised advertising text which directed users to web sites of advertisers' choosing – Whether search engine operator engaged in misleading or deceptive conduct by publishing or displaying sponsored links which contained misleading representations made by advertisers – Whether search engine operator adopted or endorsed misleading representations.

Words and phrases – "adoption", "endorsement", "intermediary", "misleading or deceptive conduct", "misleading representation".

Trade Practices Act 1974 (Cth), ss 52, 85(3).

  1. FRENCH CJ, CRENNAN AND KIEFEL JJ.   The appellant, Google Inc ("Google"), operates the well-known internet search engine "Google" ("the Google search engine")[1]. The respondent, the Australian Competition and Consumer Commission ("the ACCC"), claims that particular search results displayed by the Google search engine between 2005 and 2008 conveyed misleading and deceptive representations, and that, by publishing or displaying those search results, Google engaged in conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Act")[2].

    [1]The Google search engine is accessible to users in Australia through the web sites google.com and google.com.au.

    [2]Section 52 of the Act was replaced on 1 January 2011 by s 18 of the Australian Consumer Law, a schedule to the Competition and Consumer Act 2010 (Cth).

  2. In July 2007, the ACCC initiated proceedings under Pt VI of the Act, seeking declarations and injunctive relief against Google and another party. At first instance in the Federal Court of Australia, the primary judge (Nicholas J) dismissed the ACCC's application to the extent that it related to Google on the basis that Google had not made the misleading and deceptive representations relied upon by the ACCC[3]. The Full Court of the Federal Court (Keane CJ, Jacobson and Lander JJ) allowed the ACCC's appeal, and made declarations to the effect that Google had contravened s 52 of the Act by publishing the search results[4].  By special leave, Google now appeals to this Court.…

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Details
Case
[2013] HCA 1
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal by Google Inc. against a decision of the Full Court of the Federal Court of Australia, which had upheld findings that Google had engaged in misleading or deceptive conduct in contravention of section 52 of the *Trade Practices Act 1974* (Cth). The Australian Competition and Consumer Commission (ACCC) alleged that Google, through its operation of the Google search engine and its AdWords program, had published or displayed sponsored links containing misleading representations made by advertisers, and that Google had adopted or endorsed these representations.

The central legal issues before the High Court were whether Google, by displaying sponsored links generated by advertisers through its AdWords program, had engaged in misleading or deceptive conduct. Specifically, the court had to determine whether Google adopted or endorsed the misleading representations contained within those sponsored links, and whether the principles applicable to intermediaries or agents could be applied to Google's conduct in this context.

The High Court reasoned that Google, in displaying sponsored links, was acting as an intermediary that did not create or control the content of those links. The court distinguished Google's role from that of a publisher or advertiser, emphasizing that the search engine merely provided a platform for advertisers to display their own material. The court found that Google did not adopt or endorse the representations made by the advertisers in the sponsored links, and therefore did not engage in misleading or deceptive conduct under section 52 of the Act.

Consequently, the High Court allowed Google's appeal, setting aside the orders of the Federal Court and the Full Court. The appeal to the Full Court was dismissed with costs.

Orders

Orders of the court

1. Appeal allowed with costs.

2. Set aside the orders of the Full Court of the Federal Court of Australia made on 3 April 2012 and the orders of the Federal Court of Australia made on 4 May 2012 and, in their place, order that the appeal to the Full Court be dismissed with costs.

Background

Background to the litigation

As will be explained below, the ACCC contends that Google and the Google search engine do not operate analogously to other intermediaries or agents, and that the principles established in relation to intermediaries or agents do not apply to the facts of this case.Factual background In order to explain the conduct by Google which the ACCC says contravenes s 52 of the Act, it is necessary to say something about the operation of the Google search engine, its interaction with Google's AdWords program, and how each of the STA Travel advertisements, the Carsales advertisements, the Ausdog advertisement and the Trading Post advertisement came to be created using the AdWords program and displayed using the Google search engine.The internet and the Google search engine The internet is a global network of networks of computers. Computers connected to the internet communicate with each other – requesting and receiving data – by means of a common language, the Internet Protocol[29]. The World Wide Web is a vast system of interlinked documents ("web pages") which can be accessed by computers connected to the internet. Each web page has a unique address, or URL[30]. An internet user who wishes to access a web page at a known address can access that web page by entering the address into the web browser on his or her computer.[29]See Roadshow Films Pty Ltd v iiNet Ltd (2012) 86 ALJR 494 at 498-499 [15] per French CJ, Crennan and Kiefel JJ; 286 ALR 466 at 470; [2012] HCA 16.[30]The acronym "URL", for uniform resource locator, is used to refer to the address of a web page. An internet user who wishes to access a web page but does not know its address, or wishes to locate a selection of web pages relevant to a particular topic, is likely to use an internet search engine, like the Google search engine, in much the same way that a person who does not know the telephone number of a particular business, or wishes to contact a local provider of a particular product or service, might once have been likely to use a telephone directory. The Google search engine allows internet users to search for web pages by entering search terms into a search field and clicking on a button marked "Google Search" ("the search button"). Google keeps and constantly updates an index of billions of web pages which enables it to respond to users' search requests. Google does not control the search terms entered by users of the Google search engine, or the material available on the internet. During the period relevant to these proceedings, if a user of the Google search engine entered search terms into the search field and clicked on the search button, the Google search engine would display two types of search results: "organic search results" and "sponsored links". Organic search results are links to web pages, which are ranked in order of relevance to the search terms entered by the user. The Google search engine always displays organic search results, and organic search results are always displayed free of charge. Google does not sell placement in its organic search results. Instead, the order of relevance of organic search results is determined by a complex proprietary algorithm developed by Google which is a function of many factors, including the content of each web page which Google has indexed, and the number and type of links between each of those web pages.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

FRENCH CJ, CRENNAN AND KIEFEL JJ (dissent) HAYNE J

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Ratio Decidendi

Legal Principle Established

Established by: HAYNE J

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