Google AdWords case goes to Australia's High Court

The court will decide whether Google deceived consumers by allowing companies to make AdWords purchases of names belonging to competitors

Australia's High Court on Tuesday began hearing Google's appeal of a ruling that it sold misleading advertisements that allowed companies to purchase keywords containing competitor's names.

The case was brought by the Australian Competition and Consumer Commission (ACCC) in 2007 after it found 11 advertisements that contained business names, product names or web addresses for a competitor's business which had not bought AdWords advertisements from Google.

Google prevailed in October 2011, when a Federal Court judge found that some of the advertisements were misleading but that Google had only presented the representations of the advertisers.

The ACCC appealed. On April 3, the Full Federal Court ordered that Google put in place a consumer compliance program after it found four advertisements that were misleading or deceptive and breached Australia's Trade Practices Act of 1974.

Keywords for AdWords are sold by auction and are then matched to people's search queries. With the four advertisements cited by the Full Federal Court, searches for a company's name brought up sponsored links containing the name, but the advertisements lead to the websites of a competitor who had paid for the ads.

In its defense, Google had said it was a publisher that was not responsible for the content and representations made by AdWords purchasers.

The High Court, in Canberra, is not expected to release a ruling for a few months after the hearings conclude, according to an ACCC spokesman.

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