Google sued by Australian Government: What gives?

Google and the Trading Post are being taken to court by the Australian Competition and Consumer Commission alleging misleading and deceptive conduct in relation to sponsored links that appeared on the Google website [courtesy of the ACCC’s press release].

In response, Google Australia’s Rob Shilkin has said these claims will be defended vigorously and that this is “an attack on all search engines and the Australian businesses, large and small, who use them to connect with customers throughout the world.”

The ACCC appears to be gunning for Google in a test case to create certainty for businesses in Australia. As Kim Tunbridge points out, up until now the legal position has been unclear:

The legal position in Australia regarding the use of competitors’ keywords as search terms in Google Adwords, is not clear. In my view, this will be dependent on whether Australian courts regard the Google search engine as a research service (in a similar way to the US courts) or a marketing service (in a similar way to the French courts).

If the ACCC’s approach to the Stickybeek and Trading Post dispute is anything to go by, it is likely that an Australian Court will regard the Google search engine as a marketing service and will find such conduct to be misleading and deceptive conduct, passing off, trademark infringement and/or copyright infringement.

This approach would be similarly supported in other Australian internet cases involving domain name registration of competitors’ trademarks and cyberstuffing (using competitors’ trademarks as metatags).

A recent case in Australia indicates that registering a competitor’s registered trading name (whether intentionally or unintentionally) as a domain name will cause confusion and diversion of business. The court also indicated that it may be misleading and deceptive conduct if a business:

  • falsely suggests a connection between its site and a known business or particular goods or services
  • buys the domain name of a rival company and redirects traffic from that site to its site; or
  • exploits reading or typing mistakes or abbreviations.

The general view is that cyberstuffing will also be misleading and will constitute trademark infringement and passing off. Cyberstuffing involves embedding metatags in a website in order to have the metatags picked up by search engines. If a company stuffs its website with metatags containing the names or trademarks of its competitors, it is likely that its website will always answer to search queries involving those other competitors’ names and trademarks.

Arguably, a key legal difference between registering keywords of competitors in Google Adwords, and registering domain names of competitors or cyberstuffing competitors’ keywords in a website is that in Google Adwords:

  • the registrant is not building a reputation or effectively “trading” under the search term; and
  • the registrant is nominating a search term on a search engine used by the public, not reproducing
    registered trademarks on a privately owned website.

We will have to see how an Australian court chooses to deal with this.

Duncan Riley makes the point that trade practices laws in Australia are stronger than similar laws in the US, so this isn’t a case in which Google will be assured a win.
While it will prove an interesting case to follow, I can’t help but feel in a country that is fast becoming an Internet follower rather than a leader, it would be more beneficial to heed the words of Peter Coroneos, the CEO of the Internet Industry Association:

“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.”

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One thought on “Google sued by Australian Government: What gives?

  1. I couldn’t understand some parts of this article Google sued by Australian Government: What gives?, but I guess I just need to check some more resources regarding this, because it sounds interesting.

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