Watchdog takes Google to court

It won’t be the first time – and it won’t be the last....

Google, the world's biggest search engine, is being taken to court by the Australian competition watchdog, alleging misleading and deceptive conduct.

The Australian Competition and Consumer Commission (ACCC) alleges Trading Post Australia, Google Ireland, Google Australia and Google Inc. were misleading in the search engine’s “sponsored links” section.

The ACCC said that in 2005, sponsored links titled “Kloster Ford” and “Charlestown Toyota” allegedly appeared on Google, but the links allegedly directed users to the Trading Post website. Both dealerships compete with the Trading Post.

The ACCC said by publishing the links, Google allegedly engaged in “misleading and deceptive conduct”.

Google also continues to allegedly fail to “adequately distinguish sponsored links from ‘organic’ search results”, according to an ACCC statement.

Google Australia spokesperson Rob Shilkin said the action affects all search engines.

“Google Australia believes that these claims are without merit and we will defend against them vigorously,” Mr Shilkin said. “They represent an attack on all search engines and the Australian businesses, large and small, who use them to connect with customers throughout the world.”

Internet Industry Association chief executive Peter Coroneos said the move comes after a long-standing “positive” relationship with the regulator.

“It's very unfortunate that the ACCC has decided to pursue a litigious strategy against one participant, rather than consulting more broadly on an issue that affects the entire industry,” Mr Coroneos said.

ACCC chairman Graeme Samuel declined to comment.

In 2002, the US Fair Trade Commission (FTC) made the recommendation that search engines should have a “clearer disclosure of the use of paid inclusion” after a year-long investigation into sponsored links. The FTC did not take any formal action over the use of the sponsored links. The ACCC said this case was different to the US investigation.

http://www.news.com.au/business/story/0,23636,22061736-462,00.html