Google Inc., owner of the world's most-popular internet search engine, didn't mislead Australian consumers with sponsored ads that showed up during web searches, Australia's top court ruled.
The High Court of Australia today overturned a lower court ruling, saying Google didn't create the sponsored links that were displayed and accordingly didn't engage in misleading or deceptive conduct.
"This is a benchmark case in both Australia and internationally in respect to online advertising practices and the responsibility of website hosts for third-party content," Colleen Platford of Gilbert & Tobin Laywers, Google's attorneys, wrote in an e-mailed statement following the ruling.
The Australian Competition & Consumer Commission, the nation's antitrust regulator, sued Google in 2007. The case was the first claim of its kind in the world that sought to make the search-engine company responsible for the content of ads, the regulator said. Australian law had relied on a 1978 decision in Universal Telecasters (Qld) v. Guthrie where a television broadcaster was held liable for a misleading ad.
"Ordinary and reasonable users of the Google search engine would have understood that the representations conveyed by the sponsored links were those of the advertisers," the High Court said in a summary of the ruling posted on its website. Those users "would not have concluded that Google adopted or endorsed those representations" it said.
The ACCC cited four advertisements, including a paid ad for STA Travel that showed up in a search for Harvey World Travel. STA Travel competes with Harvey World Travel for business.
The regulator will review the judgment to determine whether it has broader ramifications for Australian consumer law, the ACCC said in an e-mailed statement today.
"The ACCC took these proceedings to clarify the law relating to advertising practices in the internet age," Rod Sims, chairman of the ACCC, said in the statement.
The case is Google Inc. v. Australian Competition and Consumer Commission. 2013 HCA1. High Court of Australia (Canberra).