This morning I got an email from my local grocery store, offering me a special on roses for Valentine's Day. What amused me was the last line: pssssst - email this to the partner in your life as a subtle hint...The logician in me said "but how can it be subtle if you do something as obvious as emailing it? Fair Trading Act breach? Misleading conduct?" Then the lawyer in me said "but this is so obvious that no one would be misled by it. Not a breach but a Tui moment."
Last April, I wrote an article about the Court case in Australia against Google. This was brought by the ACCC, the Australian counterpart of our Commerce Commission, who claimed that sponsored links on Google searches conveyed misleading or deceptive representations. Google adopted or endorsed them and thus breached the Australian equivalent of the Fair Trading Act. The Federal Court of Australia agreed, and not surprisingly Google appealed to the High Court of Australia, the equivalent of our Supreme Court. Google's appeal was successful.
The examples given were Honda advertisements, where displayed links lead to motor dealers who were not Honda agents, STA Travel, where the links lead to competitive sites, and several other businesses. We all know that Google searches will automatically turn up links to competitive sites, and we can recognise them straightaway. We also know that the links turn up automatically based on our search criteria, and that no person puts their mind and effort into setting up each page. It was because of the automatic response that the ACCC had challenged Google rather than the advertisers.
Those of you who use Google AdWords will be pleased to know that the HCA Judges took a different view from the Federal Court. They looked carefully at the relevant provisions of the Act (effectively the same as those of our Fair Trading Act) and pointed out that the issue is quite objective: is the conduct misleading or deceptive or likely to mislead or deceive. The sponsored links would clearly be understood by Google users as being statements made by advertisers, not by Google. And of course, this is quite clear on the Google search page. Therefore Google itself had not carried out any misleading or deceptive conduct. In any case, it might well have had a publisher's defence.
A key point here of course was that 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. So Google did not engage in conduct that was misleading or deceptive.
Does this leave open liability for the advertisers themselves? I don’t think so. Clearly if the advertiser includes in its AdWords a competitor's brand name or other intellectual property, it will be breaching the Fair Trading Act as well as intellectual property rights. You wouldn't want to go there, because it will be the competitor who will take action. However, it is probably fair to say that having your sponsored link turn up through the AdWords facility is the Internet version of putting your advertisement for IT products in Reseller News or PC World. The reader chooses the magazine or Google search because that is the kind of thing he or she wants to look at and learn about. And, just like my roses email, no reasonable person would be misled. But I won’t forward it – my Valentine roses are growing in the garden.