In brief
Today, the High Court unanimously found that Google Inc. (Google) had not engaged in misleading and deceptive conduct in displaying sponsored links.

Decision
Today's decision in Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 overturns the Full Federal Court's finding that Google had engaged in misleading and deceptive conduct and restores the decision of the trial judge. The key issue in the three separate judgements (French CJ, Crennan and Keifel JJ, Hayne J and Heydon J) was the finding of the trial judge that Google itself had not made the impugned representations in the sponsored links.

The unanimous decision of the High Court has reaffirmed the first instance decision of Justice Nicholas that while the representations were misleading and deceptive, the representations had not been made by Google. In other words, Google had not engaged in misleading or deceptive conduct in contravention of section 52 of the TPA. Rather, Google had sufficiently distinguished advertisers' advertisements contained in sponsored links from Google's organic search results and therefore misleading or deceptive representations made in the advertisements were made by the advertiser and not by Google. The High Court affirmed the reasoning of Justice Nicholas that ordinary and reasonable users of Google would realise the sponsored links were advertisements and the content of them was created by the advertiser, not by Google. The High Court agreed that Google had merely passed on the message from the advertiser to the consumer.

Today's decision has overturned the (also) unanimous decision of the Full Federal Court, which had found that Google was responsible for the advertisement as it was 'much more than a mere conduit' by generating the sponsored link in response to particular search queries.

In reaching today's decision, each judgment of the High Court determined that the misleading and deceptive advertisements were those of the advertisers and not Google. Heydon and Hayne JJ stated that the Australian Competition and Consumer Commission had failed to establish its central allegation that Google had made the representations conveyed by the advertisements.

Lessons
The decision is significant in that it provides some comfort to online providers such as Google that they are not likely to be found to have engaged in misleading and deceptive conduct, provided that they distinguish their organic search results from advertisements. If Google had failed in this regard, Heydon J in his judgement today stated that the limited defence offered to information providers by section 65A TPA (now section 19 of the Australian Consumer Law (ACL)) would probably have been unavailable to Google in this instance, though the majority of the High Court chose not to address this issue.

Nonetheless, advertisers must remain vigilant about how they use AdWords in light of the decision at first instance in which the Trading Post was found to have engaged in misleading or deceptive conduct. The Trading Post paid Google to ensure that 'Kloster Ford' or 'Charlestown Toyota' search terms would generate sponsored links to the Trading Post's website. The Trading Post was found to be in breach of sections 52 and 53 of the TPA (now sections 18 and 29 of the ACL) for falsely representing an affiliation with 'Kloster Ford' and engaging in misleading or deceptive conduct.

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