Nicholas J in the Federal Court declared that -
1. By publishing or causing to be published advertisements on or about 28 August and 30 August 2005 in response to searches undertaken using the search engine at the website at www.google.com.au for the keyword “Kloster Ford” in circumstances where:In essence, the Trading Post used Google's AdWords program to generate an advertisement that featured the term 'Kloster Ford' but "did not have anything to do with Kloster Ford or vehicles Kloster Ford was offering for sale". The Court held that the Trading Post had therefore engaged in misleading or deceptive conduct.
(a) each advertisement included a headline consisting of the words “Kloster Ford”;the first respondent [the Trading Post, a Telstra subsidiary], in trade or commerce, engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 52(1) of the Trade Practices Act 1974 (the Act) by representing, contrary to the fact, that:
(b) each advertisement included a link to the website at www.tradingpost.com.au;
(c) no information regarding Kloster Ford could be found at the website at www.tradingpost.com.au; and
(d) no information regarding Kloster Ford car sales could be found at the website at www.tradingpost.com.au
(i) there was an association or affiliation between the first respondent and Kloster Ford;2. By publishing or causing to be published advertisements on or about 28 August and 30 August 2005 in response to searches undertaken using the search engine at the website at www.google.com.au for the keyword “Kloster Ford” in circumstances where:
(ii) information regarding Kloster Ford could be found at the website at www.tradingpost.com.au; and
(iii) information regarding Kloster Ford car sales could be found at the website at www.tradingpost.com.au.
(a) each advertisement included a headline consisting of the words “Kloster Ford”;the first respondent, in trade or commerce, in connection with the supply or possible supply of goods or services, represented that it had an affiliation which it did not have and thereby contravened s 53(d) of the Act.
(b) each advertisement included a link to the website at www.tradingpost.com.au;
(c) no information regarding Kloster Ford could be found at the www.tradingpost.com.au website; and
(d) no information regarding Kloster Ford car sales could be found at the tradingpost.com.au website
Google’s placement of AdWords advertisements in its search results pages was not held to be misleading or deceptive conduct.
The case arose from operation by Google Inc (the second respondent) of what the Court characterised as "the well known internet search engine also known as 'Google'". Trading Post Australia Pty Limited, the first respondent, paid Google to advertise. The Australian Competition & Consumer Commission alleged that Google and Trading Post, in trade or commerce, engaged in conduct that is misleading or deceptive or likely to mislead or deceive and that each contravened s 52 of the Trade Practices Act 1974 (Cth). The ACCC alleged that Trading Post also contravened s 53(d) of that Act. The ACCC alleged that the appearance of organic search results and sponsored links (ie the ads paid for by Trading Post) is essentially the same, arguing that the features of the relevant webpages that are said to distinguish organic search results from sponsored links are insufficient to do so.
The proceeding was settled as between the ACCC and Trading Post, with agreement between all parties that no declarations should be made as between the ACCC and Trading Post until the claims made against Google were determined - reflecting the possibility that claims regarding Google were unsuccessful.
