Google Investigated for Adsense Fraud
ACCC alleges misleading and deceptive conduct by Trading Post and Google Now, what is this lawsuit all about? (I have reprinted the entire article for ease of reference.) The suit is very interesting because the ACCC sued both Google and Trading Post.
The Australian Competition and Consumer Commission has instituted legal proceedings in the Federal Court, Sydney, against Trading Post Australia Pty Ltd, Google Inc, Google Ireland Limited and Google Australia Pty Ltd alleging misleading and deceptive conduct in relation to sponsored links that appeared on the Google 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.
The ACCC is also alleging that Google, by causing the Kloster Ford and Charlestown Toyota links to be published on its website, engaged in misleading and deceptive conduct in breach of section 52 of the Act.
Further, the ACCC is alleging that Google, by failing to adequately distinguish sponsored links from "organic" search results, has engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Act.
The ACCC is seeking:
* declarations that Trading Post contravened sections 52 and 53(d) of the Act
* declarations that Google contravened section 52 of the Act
* injunctions restraining Trading Post from representing through sponsored links an association, sponsorship or affiliation with another business where one does not exist
* injunctions restraining Google from publishing sponsored links of advertisers representing an association, sponsorship or affiliation where one does not exist
* injunctions restraining Google from publishing search results that do not expressly distinguish advertisements from organic search results
* orders that Trading Post and Google implement trade practices compliance programs
* an order that Google publish a notice on its website outlining the above, and
* costs.The matter has been listed for a directions hearing in the Federal Court, Sydney, on 21 August 2007 before Justice Allsop.
This is the first action of its type globally. Whilst Google has faced court action overseas, particularly in the United States, France and Belgium, this generally has been in relation to trademark use. Although the US anti-trust authority the Federal Trade Commission has examined similar issues, the ACCC understands that it is the first regulatory body to seek legal clarification of Google's conduct from a trade practices perspective.
What Trading Post has done is attempt to divert traffic from its competitors -someone looking to purchase an automobile, might look at the sponsored link, and think that Trading Post had some affiliation with or sponsorship from what turns about to be its competitors. It would be as if a Chevrolet commerical contained what looked like an endorsement from Ford.
And while, Google Australia has been quick to defend itself against these allegations, with Rob Shilkin, head of corporate communications & public affairs at Google, issuing the following statement:
Google Australia believes that these claims are without merit and we will defend against them vigorously. They represent an attack on all search engines and the Australian businesses, large and small, who use them to connect with customers throughout the world
I think that there is some merit to the ACCC's position -after all Trading Post is deceiving the consumers about the relationship it has with its competitors and obtaining traffice that might have gone to their competitors website.
But on the other hand, I have some sympathy for Google -how can it effectively review all the competitors of a company? It will be interesting to see how this resolves itself.
