Aussie Auto Dealers Spark Google Ad Lawsuit With Global Ramifications

13 July 2007

SYDNEY: In a case due to be heard on August 12 in Sydney's Federal Court, the mighty Google will stand accused by the Australian Competition and Consumer Commission of misleading and deceptive conduct. For Google, the verdict could have global repercussions.

The AC&CC alleges that auto-sales website Trading Post contravened the Trade Practices Act when two of Google's sponsored links, Kloster Ford and Charlestown Toyota, featured on its site in 2005.

Both firms are local auto dealerships in competition with Trading Post. Alongside Google, they are charged with causing the links to be published on Trading Post's site and of misleading and deceptive conduct in breach of the Act.

Google is also accused of failing to adequately distinguish sponsored links from 'organic' search results.

The AC&CC seeks injunctions that restrain ...

  • Trading Post from representing through sponsored links an association, sponsorship or affiliation with another business where one does not exist.

  • Google from publishing sponsored links of advertisers representing an association, sponsorship or affiliation where one does not exist.

  • Google from publishing search results that do not expressly distinguish advertisements from organic search results
Claims the watchdog: "This is the first action of its type globally. Although the US ... Federal Trade Commission has examined similar issues, the ACCC understands that it is the first regulatory body to seek legal clarification of Google's conduct from a trade practices perspective."

It adds: "Whilst Google has faced court action overseas, particularly in the United States, France and Belgium, this generally has been in relation to trademark use."

Data sourced from Sydney Morning Herald and AC&CC website; additional content by WARC staff