Australia's consumer watchdog said Thursday it has launched a court action accusing Internet giant Google for misleading web users by misidentifying sponsored links on its search engine.
The Australian Competition and Consumer Commission (ACCC) said it wanted Google) to stop publishing search results that fail to distinguish between paid advertisements and 'organic' search results.
The ACCC said the case arose in 2005 when Google's search engine listed two car dealerships from the New South Wales city of Newcastle as sponsored links, which are paid for by companies to attract Internet users.
However, the links fed through to the website of a rival to the dealerships, the classifieds magazine 'Trading Post', which competes with them for automotive sales.
'The ACCC is alleging that Google, by failing to adequately distinguish sponsored links from 'organic' search results, has engaged in and continues to engage in misleading and deceptive conduct,' the regulator said in a statement.
It said it is seeking declarations from the Federal Court that Google and Trading Post had breached trade practices legislation, as well as injunctions preventing Google from publishing results that did not distinguish adverts.
The ACCC named Google Inc, Google Ireland Ltd and Google Australia Pty Ltd as defendants in the action, along with the Trading Post magazine.
It said it believed the legal action had no global precedent, Thomson Financial reports.
The ACCC is seeking declarations that the Trading Post contravened sections 52 and 53(d) of the Act, declarations that Google contravened section 52 of the Act and injunctions restraining Trading Post from representing through sponsored links an association, sponsorship or affiliation with another business where one does not exist.
Of greater gravity to the Internet industry, the ACCC is also seeking injunctions restraining Google from "publishing sponsored links of advertisers representing an association, sponsorship or affiliation where one does not exist," and injunctions restraining Google from "publishing search results that do not expressly distinguish advertisements from organic search results."
Google has already received the support of Peter Coroneos, Chief Executive of the Internet Industry Association, who suggests Google is being singled out for a practice common to the Internet marketing industry.
Google Australia is a member of the IIA. But Coroneos told ZDNet Australia that was not the reason the association was voicing its opinion on the case.
"We think this case has ramifications for the entire industry," he said. "I'm perplexed that the ACCC has chosen to move directly to litigation, rather than engage in discussion."
Coroneos refused to comment as to whether such paid search practices were common across the industry. "We are not commenting on the merits of the case, just the approach the ACCC has taken."
Prepared by Alexander Timoshik
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