Google Inc. (NASDAQ:GOOG) has a ubiquitous network of advertising all over the world, and it has algorithms in place to determine the best ads that fit with certain search keywords. But should a company like Google be responsible for checking on the legitimacy of links tht are placed on ads, or check for misleading advertising? Should that be the responsibility of the advertiser? In Australia, some of those questions could be answered legally today.
The Australia High Court is due to rule today on an interesting case regarding Google Inc. (NASDAQ:GOOG) and companies that advertise with Google. This case involves an Australian classified-ad business The Trading Post, which is accused to having misleading advertisements, as spotted by an Australian consumer watchdog group. Google figures into this in that it is being accused of allowing The Trading Post to publish these advertisements, which involved using the names of two rival car dealerships to entice consumers to click on The Trading Post advertisement to lead to related classified ads regarding cars for sale. The claim was that having the dealerships’ names on the ad was misleading in that the link didn’t go to either of the dealership sites but instead going to The Trading Post.
This case first came up in 2007 when the consumer-watchdog, ACCC, filed suit against The Trading Post, Google Inc. (NASDAQ:GOOG), Google Australia and Google Ireland with allegations of misrepresentations, and alleging that Google allows advertisers present a connection with other businesses when one doesn’t exist. The ACCC is targeting Google in this case to try to prevent such misrepresentations from happening again, making the web site that publishes the ad responsible for the content. There are millions of dollars at stake in this case.
The Full Federal Court in Australia sided with ACCC last April, but the High Court granted Google Inc. (NASDAQ:GOOG) an appeal in June.
What might this mean in the search and online advertising market?