‘Bolt from the blue’ for Google

The Australian competition regulator’s decision to take Google to court over alleged misleading and deceptive conduct in relation to sponsored links on the search engine group’s website could have wide industry implications, experts warned on Friday.

The Australian Competition and Consumer Commission, which has a history of taking on large companies and winning most of its legal cases, this week filed what is thought to be the first trading standards lawsuit against Google.

The ACCC has taken aim at the design of the results pages Google returns in response to a search request, accusing the company of failing to create a clear enough distinction between its ”organic” search results and the adverts that run alongside them.

It also wants a ruling on search results that imply an association between a company and its competitors. Such a ruling would have implications for how Google allows keywords to be registered from a trade practices perspective.

Peter Coroneos, chief executive of trade body the Internet Industry Association, said the ACCC’s move was a “bolt from the blue” for Google and the industry.

He said the case went to the heart of Google’s operating model in Australia and elsewhere around the world.

“The [Australian] internet industry has had a long and positive relationship with the ACCC and it is highly perplexing that they have moved directly to litigation.”

The action could prove a test case for other search engine companies with implications for Yahoo and MSN.

A Sydney-based lawyer said: “Litigation tends to be unpredictable in terms of outcome because there are so many factors to be considered.”

In common with its design in other countries, Google’s Australian search site returns two sets of sponsored links, or advertisements, with its search results.

One set runs down the right side of the page, separated by a light rule from the rest of the page and under the words “sponsored links” in a lighter typeface.

The second set appears at the top of the organic search results, though in a separate coloured box, with the words “sponsored links” above and to the right of the results.

In a statement, the Australian agency said that while the search engine had faced action in the US and elsewhere on trademark issues, it “understands that it is the first regulatory body to seek legal clarification of Google’s conduct from a trade practices perspective”.

The case has been listed for preliminary hearing on August 21.