Australian Consumer Watchdog Files Suit Against Google Adwords

Australian Consumer Watchdog Files Suit Against Google Adwords

October 9, 2013 0 By Sophia

The Australian Competition and Consumer Commission (ACCC) is taking legal action against Google Inc, as well as Google subsidiaries in Ireland and Australia, over the way it sells and displays sponsored links.

From the U.K.’s Times Online:

“The Australian Competition and Consumer Commission (ACCC) said that it believed its action, which named Google Inc as well as Google subsidiaries in Ireland and Australia as defendants, was “the first to seek legal clarification of Google’s conduct from a trade practices perspective.”

The case stems from 2005 when Trading Post, an Australian classified ads magazine, took out sponsored links in the name of two car dealerships from Newcastle, New South Wales. People clicking on the names of the dealerships found themselves on Trading Post’s website.

The ACCC dropped a case against Trading Post when the publication said it would stop using its competitors’ names in Google sponsored links. However, the watchdog now says that Google “engaged in misleading and deceptive conduct” by allowing Trading Post to buy ads in the name of the car dealerships.

Misleading and deceptive conduct? Take a look at this screenshot of the search “Billabong” on Google Australia:

billabong.jpg

 

The highlighted advertisement, “Billabong official site,” deceptively and illegaly claims it is the official site of Billabong, when it turns out to be a third rate shill shop that provides no contact information on their website, Skateamerica.com.

Let’s see what we can find out about Skate America. Here’s a screenshot of their “Contact” page:

skate-america.jpg

Hmmmmm… Let’s see. No phone number. No address. The old “send us an email” style of customer service–wait a second, that sounds exactly like Google Customer Service.

After searching Google for more information I stumbled across a message thread chock full of ripped-off customers. What a shocking discovery.

skate-america-2.jpg

Back to the story:

“In addition the ACCC is also claiming that the way Google displays its links is misleading.

On Google’s search results page, sponsored links appear in a coloured panel at the top of the page, and in a narrow column on the right-hand side of the page. Both areas include a small heading identifying the results as sponsored.”

The ACCC goes on to declare that Google Adwords engages in misleading and deceptive conduct. In my mind there are three issues here:

1. As stated by the article, Google’s search engine advertisements for trademarks create confusion.

2. Google’s search engine advertisements for trademarks by third parties constitute trademark dilution.

3. Google and the third party advertisers are unfairly leveraging established trademarks for profit, as held by the French courts.

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