The five judges of the High Court of Australia unanimously decided on Wednesday that Google has not infringed trade laws allowing companies to buy AdWords on competitors' names. The decision overturned the decision of the Federal Court last April that found four ads on the site purchased between March 2006 and July 2007 were misleading and in violation of the Trade Practices Act of Australia 1974.
Google appealed the decision, arguing that he was merely acting as a publisher and is not responsible for the content and representations made by buyers AdWords.
The High Court ruled today, saying that even casual users of the search engine would not be confused as the creator of Google ads.
"In the first instance, the judge found that although the main representations at issue were misleading and deceptive, these representations had not been made by Google," the court said. "The members of the ordinary and reasonable consumer group that may be affected by the alleged conduct would have understood that the sponsored links are ads and would not have approved or even Google have been significantly responsible for the content of these ads. " Google said in a brief statement that it welcomed the decision.
The decision ends a legal battle six years between Google and the Australian Competition and Consumer Commission (ACCC), Watchdog consumers in this country. The ACCC in 2007 accused Google of engaging in "deceptive" behavior when it appears ad for a company called Carsales in search results related to Honda Australia.
The ACCC said it brought the case to clarify advertising law in the digital age and would review the judgment to determine whether there were broader ramifications.
"It was not disputed in the High Court that the representations made in sponsored links by advertisers were misleading or deceptive," ACCC Chairman Rod Sims said in a statement. "It remains the case that all businesses involved in placing advertisements on search engines must take care not to mislead or deceive consumers."
AdWords allows anyone to bid on a given keyword and win placement on the top or right side of a search results page based on a combination of factors such as the maximum bid for that keyword as well as the quality of the ad.
Google has been sued before by companies such as American Airlines, GEICO, and Rosetta Stone, which argued that keywords are an extension of the trademark they have acquired on their brands and that Google should not be encouraging competitors to violate the trademark by using it to promote their own products.
