ACCC ignored advice on Google

THE consumer watchdog ignored its internal advice not to take action against internet giant Google, court documents reveal.

The Australian Competition and Consumer Commission is suing Google in the Federal Court, alleging it has engaged in misleading and deceptive conduct and breached the Trade Practices Act. A claim against the Sensis-owned Trading Post has been settled since the case was launched last year.

The ACCC claims Google does not distinguish clearly between "organic" search results and "sponsored links", which are advertisements.

Google denies the claims and yesterday the parties were in court arguing over whether the ACCC should be allowed to further amend its case against Google, which was launched in July 2007.

Google's lawyers said yesterday, in written submissions, that the ACCC's enforcement committee had considered the conduct of Google in the context of its investigation into the Trading Post in 2005.

"Staff recommended that no action be taken against Google as it takes reasonable steps to bring the issue of trademark misuse to the attention of its advertisers," Google's barrister, Tony Bannon SC, said in the submissions.

The following year the committee noted that taking action against Trading Post would not be appropriate because "the relevant class of people likely to be affected by the representation is narrow and the consumer detriment would appear to be low and difficult to quantify".

Despite this advice the ACCC took legal action in July 2007 and yesterday sought to expand its claim against Google to include a further 89 contraventions of the Trade Practices Act. Mr Bannon said the ACCC's case was "speculative and inconsistent" and that the ACCC had a "scattergun approach" to the litigation.

"No evidence has been filed by the ACCC in relation to a complaint by a user of the Google website that he or she was confused or misled in its operation," Mr Bannon said.

Justice Brian Tamberlin reserved his decision.