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Google’s win in an Australian courtroom could have far-reaching impact in the mobile advertising space for the search engine giant.
An Australian court ruled in favor of Google by saying the company didn’t mislead online users through its ad sponsored-links and that Google can’t be held liable for messages contained in online ads.
The ruling, by Australia’s High Court, allows Internet providers and search engines to say they are not publishers but rather just carriers of information that third parties provide, according to a Feb. 6 report by Reuters.
Similar cases have arisen against Google in other nations around the world, and the Australian court rulings could certainly now be viewed with some weight in those cases.
“Others will definitely be looking at this ruling,” Peter Lee, head of Australia’s Internet Industry Association, told Reuters. “Google is a worldwide business. This is something of a first, and it does add some clarity for the industry.”
The decision came after a six-year legal battle in Australia, reported Reuters.
Google had been accused by the Australian Competition and Consumer Commission (ACCC), a consumer watchdog group, of misleading and deceiving search users by displaying paid sponsor ads for competing products when users would search for a specific brand or product, according to the report.
The Australian High Court’s decision overturned a previous lower court ruling that had gone against Google on the allegations.
Ultimately, the High Court apparently agreed with Google’s position that it was not responsible for the ads because it was only a means of distribution for the advertiser, according to Reuters.
“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 stated in its decision.
The Australian court rulings come a little more than a month after Google won a related huge court decision in the United States in early January. In that case, the U.S. Federal Trade Commission resolved an antitrust probe in Google’s favor by passing on a federal probe and entering into a voluntary agreement with Google to change some of its business practices to resolve the complaints of some competitors about the company’s conduct.
Charles King, principal IT analyst for Pund-IT, told eWEEK that he agrees that the Australian court case could certainly impact other such cases around the globe.
“Google claimed it was simply a conduit for the ads,” said King. “Opponents said Google is a publisher and is responsible for the content of its ads.”
The company’s point of view is that it can’t be held accountable for everything advertisers do, he said.
King said he agrees with the court’s decision in siding with Google in the matter, but added that the company needs to step back and take a bigger picture look over how it is perceived in the marketplace.
“We’re only 10-plus years into the online commerce revolution, so I think it would behoove Google to be as transparent as possible about what it is doing,” King said. “As a world leader in worldwide advertising, Google is in a position to set the bar for advertisers and consumers for what they should provide and expect in their online e-commerce experiences.”
Google Wins Landmark Aussie Court Fight on Advertising: Reports
In the recent FTC ruling in the United States, Google won a huge battle as the commission voted to close its longtime investigation into allegations that the company has been manipulating its search algorithms to favor its results over competitors. Instead, the FTC found that not enough evidence existed to prove such allegations.
Both decisions capped a 19-month investigation into Google’s search practices and patent portfolios in the smartphone, tablet and gaming device markets.
Among the key parts of the FTC agreement with Google is that the search company will end some past business practices that could stifle competition in the markets for popular devices such as smartphones, tablets and gaming consoles, as well as the market for online search advertising, according to the agency. Under a binding settlement with the FTC, Google will allow competitors access “on fair, reasonable and nondiscriminatory terms to patents on critical standardized technologies needed to make popular devices such as smartphones, laptop and tablet computers, and gaming consoles,” the FTC reported.
Meanwhile, Google is still embroiled in an antitrust case in Europe, where the company continues to work with the European Union to resolve that agency’s concerns about Google’s allegedly anticompetitive business practices.
In late January, Google again sent a list of proposals to the EU outlining how it can change its business practices to resolve those concerns. Google had sent previous lists of proposals to the EU last summer, but those earlier proposals failed to satisfy European regulators. Google was given more time, until Jan. 31, to submit new proposals.
The EU investigation centers on what they regard as Google’s dominant position in search.
Google was first notified by the FTC of a “formal review” of its business practices in June 2011 after similar reviews began in Europe. At that time, the European Commission launched an investigation into the company’s search practices after vertical European search engines such as Foundem, eJustice.fr and Microsoft’s Ciao complained the company favored its own Web services in search results on Google.com over theirs. They argued that this put them at a significant competitive disadvantage in the market.
The initial FTC review in 2011 began after the agency heard complaints from Microsoft, Expedia, TripAdvisor, Yelp and other Websites that Google promotes its own Web services above those of competitors.
Google denied all such allegations at that time, noting that its search algorithms analyze Website quality and popularity based on links for placement as part of its PageRank system.
In July 2012, Google reached a record $22.5 million settlement with the FTC to resolve charges that Google bypassed Apple Safari browser privacy settings that blocked cookies for their users. The settlement was criticized in a statement by the Competitive Enterprise Institute, an industry group, as “a dangerously overbroad precedent that will chill Internet innovation and hurt online startups.”