Google Sued by the Australian Competition and Consumer Commission

by Anthony on July 13, 2007

The ACCC has an important role in Australia:

The ACCC promotes competition and fair trade in the market place to benefit consumers, business and the community. It also regulates national infrastructure services. Its primary responsibility is to ensure that individuals and businesses comply with the Commonwealth Credit Monitoring Guru competition, fair trading and consumer protection laws.

It serves to enforce the idea of “fair trading” and it covers all aspects of the marketplace, including customers, retailers, and wholesalers. If I felt a business was doing false advertising, or was denying me a refund, I could report them to the ACCC.

Now, the ACCC has filed suit against Google, Google Ireland, and Google Australia. Oh, and the local Trading Post. From the ACCC website:

The ACCC is alleging that Trading Post contravened sections 52 and 53(d) of the Trade Practices Act 1974 in 2005 when the business names “Kloster Ford” and “Charlestown Toyota” appeared in the title of Google sponsored links to Trading Post’s website. Kloster Ford and Charlestown Toyota are Newcastle car dealerships who compete against Trading Post in automotive sales to increase sales performance.

Seems like the Trading Post bought ads that LOOKED like they were advertising Kloster and Charlestown, when in fact they pointed to the Trading Post’s site.

Read more at The Australian. Also see Slashdot discussion.

The Trading Post has settled, and the ACCC is now going after Google for displaying the ads.

If this suit holds up it will set a precedent for very heavy ad monitoring responsibility on the part of all search engines, not just Google.

For clarification, note that the ACCC is not suing for money (aside from costs). I’m not exactly sure what they want – there’s a list of demands on the ACCC website, not all of which I understand. It seems like they want Google to say sorry, and not to let it happen again. This would include better separation of organic and paid listings, and implementing some kind of systems for Pete’s Red Widgets cannot appear when someone searches for Fred’s Red Widgets.

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