Google was recently found guilty of engaging in deceptive advertising practices on its Google Australia website. The alleged deceptive conduct involved user searches and sponsored links, which took consumers to sites that were misrepresented in the initial search results.

When a Google user searches for some commercial product, Google provides sponsored links in addition to basic, unsponsored search results. Some of the advertisers providing these sponsored links were using the Google program AdWords to link keywords to the ads of competitors that would take customers to rival products if they clicked on them. For example, a user searching for “iPhone” might be presented with a sponsored link titled “Apple iPhone” that, when clicked, would take the user to a website for the rival Blackberry Smartphone.

A lower court had previously ruled that Google was not guilty of misleading or deceptive practices as the search giant did not “make” the representations in the ads. These representations were actually made by the companies advertising in the sponsored links.

However, on an appeal filed by the Australian Competition and Consumer Commission (ACCC), the Full Federal Court (Australia’s equivalent to the U.S. Supreme Court) ruled that Google was guilty of deceiving consumers, reasoning that Google can be held responsible for the message and content it represents to users. Rod Sims, chairman of the ACCC stated that the ruling was “an important reminder that Web services must remain accountable.”

The verdict has important implications as it made clear that all search engine providers that use technology similar to Google’s will be held directly accountable for misleading or deceptive content, even when that content that is misleading is not directly created by the company but provided by paid, outside sponsors.

In a follow-up statement, Google expressed their disappointment with the Court’s decision. They stated that in their opinion it is the advertisers that should be held responsible for the ads that they create. The company stands behind Google AdWords, the program responsible for the keyword associations that resulted in the misleading sponsored search results, as a hosting platform that they believe provides a benefit to both advertisers and users. Further, the company defended itself as an organization committed to providing users with clear and accurate information, stating it immediately responds to complaints of ads that violate their terms and conditions by removing the offending advertisements.

Optional Further Reading

Course discussions will take place in your blackboard learning environment. Once you have reviewed the questions below, close this browser tab to return to your blackboard course and click the Discussion links located at the bottom of this week’s content to participate.

Question #1

As more responsibility and liability has transferred to manufacturers and suppliers over time, there has been significant debate over whether the reasonable-consumer standard, ignorant-consumer standard, or modified ignorant-consumer standard should be used to determine what advertising practices are permissible and impermissible. Assess the likelihood that a reasonable consumer would be deceived by the misleading sponsored links described in the e-Activity. Next, suggest which consumer standard you believe the Australian Competition and Consumer Commission was using when they found Google guilty of deceptive advertising practices.

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