Companies which buy Google Adwords could face extra scrutiny following a ruling in Australia’s Federal Court which found that Google engaged in “misleading and deceptive” conduct by allowing rogue ads to be shown with Internet search results.
The decision overturns a previous ruling that the search giant is not responsible for dodgy ads its advertisers create.
Businesses buying Adwords are already facing major issues in Europe. The European Court of Justice (ECJ) recently ruled that companies buying trademarked keywords for use on search engines to advertise rival services could be in breach of European law.
The Australian case centered on advertisers who bought Adwords and created ads using rivals’ names.
Travel agency STA Travel, for example, bought ads that appeared when Google users searched for rival travel agency Harvey World Travel. The copy for some of those ads mentioned Harvey World Travel, but the embedded links sent users to the STA Travel website. Several other companies indulged in similar practices.
Australia’s consumer watchdog, the Australian Competition & Consumer Commission (ACCC), has pursued Google through the courts for several years over this kind of advertising, arguing that it is unfair to consumers and to business misrepresented by their rivals.
The Federal Court agreed, saying that consumers would assume that there is an association or affiliation between the two travel agencies and that information about Harvey World Travel could be found on the STA travel website. That, the court said, means Google misled and deceived the general public.
Google must now institute a compliance programme to prevent future issues, although it claims it already checks for this kind of misleading ad and removes offending examples. The company also says it feels it is unfair it is held responsible for advertisers’ actions.
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