On 6 February 2013, the High Court of Australia handed down its first decision for the year: Google Inc v Australian Competition and Consumer Commission [2013] HCA 1. The case concerned an appeal by Google Inc (Google), the giant American company that operates its eponymous search engine, against a decision of the Full Court of the Federal Court of Australia.1
We provided a summary of the Full Court’s decision last year. The factual background, the findings of the trial judge,2 and the findings of the Full Court, are set out here.
In summary, the Australian Competition and Consumer Commission (ACCC) had claimed that Google had engaged in misleading or deceptive conduct, contrary to section 52 of the Trade Practices Act 1974 (Cth) (TPA),3 by displaying links in the results of its search engine that were misleading or deceptive.
The impugned links were instances of what are known as “sponsored links”. Businesses can pay Google so that a link to their website takes prime position in the results for a search of certain key words (chosen by the advertising business) (Sponsored Links). After the Sponsored Links, Google displays results of a search in order of relevance to the terms of a search (Organic Links).
An issue was whether Google made implied representations that Sponsored Links were Organic Links. The ACCC claimed that the overall layout of Google’s results page failed to distinguish between Sponsored Links and Organic Links. For example, some Sponsored Links to an advertiser’s website were returned when a user did a keyword search of the name of a competitor of the advertiser.
At first instance, Nicholas J found that Google users would be able to discern the identity of the true advertiser of a Sponsored Link through the displayed URL, and that Google did not adopt the contents of these advertisements. It was held that although the Sponsored Links were misleading and deceptive, the impugned representations were not made by Google.
The decision was reversed on appeal. The Full Court found that no reasonable person in Google's position could have failed to suspect that an advertiser's use of competitor's name to trigger an advertisement in favour of that advertiser would be likely to mislead.
The Court held that an ordinary and reasonable user would conclude that it was Google that was displaying the Sponsored Link in in response to a user's search: “Google was much more than a mere conduit”.4 By publishing or displaying the results, it was held that Google contravened section 52 of the TPA.
By special leave, Google appealed to the High Court.
The High Court’s decision
The High Court unanimously allowed the appeal.
French CJ, Crennan and Kiefel JJ rejected the ACCC’s contention that Google, rather than the advertisers, “produced” the impugned Sponsored Links.5 Although Google provided the advertiser with the facility which allowed the advertiser to choose keywords, it was held that “the advertiser is the author of the sponsored link”.6
Their Honours described Google as an “intermediary”, which provides technology for the purposes of assembling information provided by others. They held that Google is not relevantly different from other intermediaries such as newspapers or broadcasters. Its search engine “is only a means of communication between advertisers and consumers”.7 This led to the conclusion that Google did not endorse, adopt, or engage in misleading or deceptive conduct.8
Giving separate reasons, Hayne J held that displaying search results in the form of Sponsored Links was a form of conduct capable of attracting liability as misleading or deceptive conduct for the purposes of section 52.9
Hayne J emphasised that contravention of section 52 should be read in light of the defence in section 85(3) of the TPA,10 which excuses what would otherwise be a contravention where the publisher of an advertisement did not know, and had no reason to suspect, that the advertisement would be misleading or deceptive.
Hayne J held that Google did not need to adopt or endorse the Sponsored Link to be able to be liable for misleading or deceptive conduct. Nonetheless, he agreed with the orders of the majority.11
Heydon J also gave separate reasons in allowing the appeal. His Honour held that it is possible for a person to pass on or report a misleading statement by another person without being liable. This rests on the idea that if a person repeats what someone else says accurately, and does not adopt it, there is nothing misleading in the person’s conduct.12 Heydon J’s reasoning is distinguishable from Hayne J’s: he sees the defence in section 85(3) as a “backstop”, and that adoption of a misleading statement is required to attract liability.
Lavan Legal comment
The reasons of the majority emphasise the importance of whether a person “adopts” a misleading or deceptive statement to the question of liability.13 The majority position will be followed in subsequent cases.
The question of whether a misleading statement is “adopted” depends on the way the information is presented. In sharing information provided by a third party, you should give the listener as much context as possible.
We reiterate that, if you are unable to check the accuracy of this information, then you should tell the person to whom you are giving it:
where you obtained the information;
that you are unable to confirm its accuracy; and
that you do not endorse the information as being true and correct.
A silver bullet to all of these issues is to ensure that any information you provide is correct, and not potentially misleading or deceptive. If this is not possible, take a cautious approach, and make sure the information is accompanied by appropriate qualifications.
1Australian Competition and Consumer Commission v Google (2012) 201 FCR 503, Keane CJ, Jacobson and Lander JJ.
2 Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd (2011) 197 FCR 498, Nicholas J.
3 The conduct in question occurred before the introduction of the Competition and Consumer Act 2010 (Cth): Australian Competition and Consumer Commission v Google (2012) 201 FCR 503, [10].
4 Australian Competition and Consumer Commission v Google (2012) 201 FCR 503, [89].
5 Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, [67]-[68].
6 Ibid, [68].
7 Ibid, [69].
8 Ibid, [73].
9Ibid, [97].
10 Ibid, [117]-[123].
11 Ibid, [123]-[124].
12 Ibid, [162].
13 This principle is still applicable under the Competition and Consumer Act 2010 (Cth).
