Google Inc v Australian Competition and Consumer Commission

The High Court of Australia considered an appeal by Google Inc. against a decision of the Full Federal Court, which had upheld a finding by the Australian Competition and Consumer Commission (ACCC) that Google had contravened section 52 of the Trade Practices Act 1974 (Cth) (now section 18 of the Australian Consumer Law). The dispute concerned Google's use of the term "Google" in advertisements placed by third-party businesses on its search results pages. The ACCC alleged that Google's conduct was misleading or deceptive in relation to the origin of the advertised services.

The central legal issue before the High Court was whether Google's conduct in displaying sponsored links, which appeared alongside organic search results and were labelled as "Sponsored Links," was misleading or deceptive. Specifically, the court had to determine whether consumers were likely to be misled into believing that the businesses whose advertisements were displayed were affiliated with or endorsed by Google, when in fact they were independent third parties. The ACCC contended that the presentation of these sponsored links, particularly their proximity to organic results and the use of the Google brand, created a misleading impression.

The High Court, by majority, found that Google's conduct was not misleading or deceptive. The majority reasoned that the term "Sponsored Links" was sufficiently clear and prominent to inform consumers that these were advertisements and not organic search results. They emphasised that the average consumer, when using a search engine, would understand that advertisements appearing on a search results page are paid placements and not necessarily indicative of an endorsement or affiliation with the search engine provider. The court applied the established principles for determining misleading or deceptive conduct, focusing on the likely effect of the conduct on the relevant class of consumers.

The High Court therefore allowed Google's appeal, setting aside the decision of the Full Federal Court.