06 Feb 2013

What does the High Court's Google decision mean?

Timothy Webb talks to BRRMedia about the implications of the High Court's Google decision.

What does the High Court's Google decision mean?
David Bushby, BRR Media
Timothy Webb, Special Counsel, Clayton Utz

David Bushby

Today BRR Media speaks with Timothy Webb. He's a Special Counsel in the Litigation and Dispute Resolution team here at Clayton Utz in Sydney. Tim, thanks for joining me.

Timothy Webb

Thanks for having me David.

David Bushby

Tim, Google has just landed a major victory against the ACCC with the High Court reversing a previous ruling that the search giant would be liable for sponsored links that were misleading and deceptive. Was this the expected result?

Timothy Webb

David, before I answer that can I provide just a little bit of context? These proceedings were commenced in July 2007, so this litigation has been running for almost six years. At first instance the Federal Court held that Google is not liable for misleading and deceptive conduct, and that is because it was a mere conduit and did not endorse or adopt the representations made by advertisers. On appeal the Full Federal Court held that Google was liable for misleading or deceptive conduct and that was on the basis that Google acted as a principal and not a mere conduit. On appeal again, now to the High Court, five judges have unanimously held that Google was not liable for misleading or deceptive conduct. So with that procedural history, this most recent decision could have gone either way, however I think it's fair to say that some in the legal community were surprised by the Full Federal Court decision, and personally I was expecting Google to be successful on appeal.

David Bushby

Well this decision of course is hot off the press, but any early insights into what you think might have swayed the judges in such a unanimous way?

Timothy Webb

I think there are probably three facts that were significant for the Court.

Firstly Google had no control over either the search terms that were input by users or the terms that were given to Google by the advertisers.

Secondly, each relevant aspect of the sponsored link was determined entirely by the advertiser, so the Court held that Google wasn't the author of the sponsored link - the advertiser was.

And thirdly, related to those, the Court held that Google really used its technology to combine inputs by others, that is the user and the advertiser. For those reasons Google was really acting as a conduit between the advertiser and the consumer, and in this respect it's really no different from traditional media, broadcasters, publishers etc, in that it's just publishing the advertisements of others.

David Bushby

Well just taking your point about broadcasters and publishers, search engines will certainly be relieved by this decision this morning, but would this ruling impact online advertisers and publishers more broadly?

Timothy Webb

I think firstly for advertisers this decision underscores that there is no real difference in advertising in the online space, and advertising in traditional media. The bottom line is for advertisers that you cannot engage in misleading and deceptive conduct. And it's important to remember that although Google has avoided liability, the advertisers in question in this case did not. So the message for businesses is that in placing ads on the online space, you have ensure that you don't mislead consumers.

In relation to Google obviously it would be delighted with the decision and other search engines would too. Google makes a very large amount of revenue from its sponsored link business and what this decision really means for it is it can receive advertisements from advertisers without having to satisfy itself for each of those that they do not contain misleading or deceptive content.

David Bushby

Well Tim thanks so much for giving insights so soon after the decision.

Timothy Webb

No problem at all, thanks.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.