Aussie trade watchdog charges Google over keyword misuse

Stuart Corner
Thursday, 12 July 2007 11:24

Your IT - Home IT

The ACCC alleges that Trading Post contravened sections 52 and 53(d) of Australia's Trade Practices Act in 2005 when the business names 'Kloster Ford' and 'Charlestown Toyota' appeared in the title of Google-sponsored links to Trading Post's website. Kloster Ford and Charlestown Toyota are car dealerships that compete against Trading Post in automotive sales.

The ACCC further alleges that Google, by failing to adequately distinguish sponsored links from 'organic" search results, had engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Trade Practices Act.

Google responded swiftly to the allegations, issuing a statement saying: "Google Australia believes that these claims are without merit and we will defend against them vigorously. They represent an attack on all search engines and the Australian businesses, large and small, who use them to connect with customers throughout the world."

Google was also able to call on support from the Internet Industry Association of Australia: its statement was accompanied by one from IIA executive director, Peter Coroneos, saying: "The internet industry has always had a positive relationship with the ACCC. It's very unfortunate that the ACCC has decided to pursue a litigious strategy against one participant, rather than consulting more broadly on an issue that affects the entire industry."

The case has been listed for a directions hearing in the Federal Court, Sydney, on 21 August 2007 before Justice Allsop. The ACCC is also seeking costs and, in addition to the injunctions above:
- declarations that Trading Post contravened sections 52 and 53(d) of the Act;
- declarations that Google contravened section 52 of the Act;
- injunctions restraining Trading Post from representing through sponsored links an association, sponsorship or affiliation with another business where one does not exist;
- orders that Trading Post and Google implement trade practices compliance programs;
- an order that Google publish a notice on its website outlining the above.

The ACCC says that, whilst Google has faced court action overseas, particularly in the United States, France and Belgium, this generally has been in relation to trademark use. "Although the US anti-trust authority the Federal Trade Commission has examined similar issues, the ACCC understands that it is the first regulatory body to seek legal clarification of Google's conduct from a trade practices perspective."