The Australian Competition and Consumer Commission (ACCC) has dropped its legal action against two Google subsidiaries, but the protector of the Aussie people vows to continue its fight against the search giant's Mountain View mother ship.
With a federal court action aimed at the world's largest search engine and an online classifieds extravaganza known as The Trading Post, the ACCC claims that Google is misleading the public with its money-making sponsored links.
"Contrary to some media reports today, the Australian Competition and Consumer Commission case against The Trading Post and Google Inc. continues," reads a statement from the Aussie watchdog.
According to The Australian, the ACCC has even expanded its attack on Google's sponsored links, going after the ads posted on the right side of the site's results page.
In what the organization calls "the first action of its type globally," the ACCC is alleging "misleading and deceptive conduct in relation to sponsored links that appeared on the Google website." According to the commission, such behavior violates Australia's Trade Practices Act.
The watchdog claims that the search engine cum world power fails to distinguish between sponsored links and "organic" search results, and it's peeved that The Trading Post was able to purchase ad links that included the names of two independent car dealerships, Kloster Ford and Charlestown Toyota.
The New Angle
Originally, ACCC brought legal proceedings against Google Australia and Google Ireland as well as Google Inc. and The Trading Post, but at yesterday's federal court hearing, the commission dropped its case against the two Google subsidiaries.
"The basis for this discontinuance was due to submissions made by Google Inc., the ultimate parent company of Google, that it is responsible for all representations made on www.google.com.au," the commission says. "After confirming this position, the ACCC agreed that it was appropriate that proceedings against Google Ireland and Google Australia only be discontinued as any outcome against Google Inc would necessarily be put into effect in Australia."
The ACCC also used yesterday's hearing to attack a new area of Google's results page. Previously, the commission had objected only to the sponsored links that pop up at the top of the results page, but now its saying that the ad links on the right-hand side of the page are misleading as well. In the words of The Australian, this surprised Google's lawyers.
According to the ACCC, it's the first organization to legally question the line between paid search results and unpaid. The labeling of sponsored links isn't a big issue in the U.S., but close to a dozen companies have sued Google for allowing their competitors to link sponsored links to their trademarks. This includes the world's largest airline.
Google did not responded to our request for comment, but the company previously told us the ACCC's case is unfounded: "From the outset, we have stated this case is wrongly based and we're now making our arguments to the Court," said spokesman Rob Shilkin. "Our focus is on delivering relevant information to Australian users and helping Australian businesses enjoy the benefits of search marketing." The court will revisit the ACCC case on November 16.®