Google cleared in ad keyword-squatting court case

Google has been cleared of misleading web users in a court case brought by an Australian watchdog that accused the Chocolate Factory of mixing adverts into search results. However, Trading Post – the country's top online classified advertising site – was rapped for buying ads on Google using keywords for brands it didn't own.

The legal action was sparked by the Australian Competition and Consumer Commission, dragging both Telstra-owned Trading Post and Google into court. Trading Post's publisher was accused of misleading and deceptive conduct and Google was accused of the same breach of Australia’s Trade Practices Act because the ACCC said it didn’t sufficiently distinguish between advertisements and “organic” search results.

In a 357-page finding handed down today, the Federal Court of Australia ruled that Google's search results weren’t misleading, but Trading Post’s acquisition of keywords that had nothing to do with its brand did mislead.

The trigger for the case was Trading Post’s use of the names of car dealers Kloster Ford and Charlestown Toyota as ad keywords; Google users searching for these would see a sponsored link that led to Trading Post, rather than the dealers.

Occasionally, there are rewards to be had out of reading even a long judgment. To quote from the document:

Google’s reputation in Australia might be relevant to the ACCC’s case if it was established that Google had a reputation in Australia as an advertisement free search engine or as one which clearly distinguished advertisements from organic search results. But the ACCC did not attempt to prove that Google had any such reputation; on the contrary, it is the ACCC’s case that Google has never clearly distinguished sponsored links from organic search results.

The judge also noted that Google “never actively marketed” its search engine to Australians “apart from issuing press releases”.

What it boils down to is this: even if Google did nothing at all to distinguish between paid ads and organic search results, it wouldn’t have been deceptive because Google never said to anybody in Australia that it distinguished between ads and search. El Reg would guess that the ACCC’s lawyers, considering an appeal, are dissecting this section.

Later, the judge makes the remarkable observation that people are probably smart enough to distinguish between organic search and advertising links, even if the latter are ambiguously labeled.

In the other part of the accusations against Google, the ACCC had argued that the web giant, as well as Trading Post (which bought the AdWords), was responsible for pretending there was a relationship between Trading Post and Kloster Ford and Charlestown Toyota.

That claim, the court has found, was made by Trading Post alone.

And so it goes for a host of examples of advertisers keyword-squatting on competitors’ brands: where a false representation exists, the court has said, it’s made not by Google, but by the advertiser that’s buying the keywords – something that might, arguably, be worrying to smaller businesses that just laid out their last spare cash defending their brands against the great .xxx domain shakedown. ®