By James Grubel
CANBERRA, Feb 6 (Reuters) - Google Inc won a landmark court
case on Wednesday when Australia's High Court ruled that it had
not engaged in misleading behavior with its sponsored links and
that it was not responsible for messages conveyed by paid
advertisers.
The ruling helps Internet providers and search engines argue
that they are not publishers, but simply carriers of information
provided by third parties.
While the judgment applies only in Australia, the ruling
will be closely watched around the world and could be cited as a
precedent in the event of similar cases arising in the rapidly
evolving area of law.
"Others will definitely be looking at this ruling. Google is
a worldwide business. This is something of a first, and it does
add some clarity for the industry," the head of Australia's
Internet Industry Association, Peter Lee, told Reuters.
The finding ends a six-year legal battle between Google and
Australia's consumer watchdog, the Australian Competition and
Consumer Commission (ACCC), which accused Google of engaging in
misleading and deceptive conduct over paid advertisements.
The ACCC based its case on search results in 2006 and 2007,
where a search for Honda Australia would show a paid
advertisement for a Honda competitor, CarSales. The ACCC said
the ads were deceptive, as they suggested CarSales was linked to
Honda Motor Co Ltd.
Google argued that it was not responsible for the
advertisements, as it was only the conduit for the advertiser.
In a unanimous finding, five judges of Australia's High
Court ruled in favor of Google, overturning a ruling from the
Federal Court. The lower court had ordered Google to set up a
compliance program to make sure paid advertisements on its
search engine were not misleading.
The five High Court judges said Google did not create the
sponsored links and the company was not responsible for messages
in the links.
"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, and would not
have concluded that Google adopted or endorsed the
representations," the court said.
Google issued a brief statement saying it welcomed the
decision, while the ACCC said it would review the judgment to
see if it had wider ramifications for Australian consumer law.
"The ACCC took these proceedings to clarify the law relating
to advertising practices in the internet age," ACCC chairman Rod
Sims said in a statement.
The legal victory comes after Google and language software
maker Rosetta Stone Inc last year settled a trademark
infringement dispute in the United States over Google
advertising practices.
Rosetta had argued people searching for its products on
Google were being directed to competitors and software
counterfeiters.
Google has since changed the way it displays its sponsored
links in Australia, now clearly labeling them as advertisements
on top of search results.
A Google search for Honda Australia on Wednesday displayed
paid ads for Honda Australia's website.
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