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Landmark Google Suit Over Foreign Ads

Posted Jul 12, 2007 3:42 PM CDT
By Martha Neil

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A landmark lawsuit has been filed over Google's Internet advertising in Australia and Ireland that could, if successful, force the search engine giant to make significant changes in the way it handles "sponsored links" paid for by advertisers.

Described by a company spokesman as an "attack" on all search engines, the litigation, which was filed by the Australian Competition and Consumer Commission, apparently is the first suit ever brought against Google by a government regulatory agency, according to Reuters.

The suit claims that Google has engaged in deceptive and misleading conduct by not more clearly distinguishing the advertising links from "organic" search engine content, explains the London Times. Google does post the sponsored links in a specific area of its Web site, under a text heading that identifies them as advertising.

Underlying the complaint are auto advertising sponsored links that appeared on Google in 2005. They allegedly were misleading for an additional reason—the links used the names of competing auto dealerships to attract Web surfers. The ACCC suit was filed in federal court in Sydney against Google subsidiaries and an auto dealer advertiser and alleges violations of Australia's Trade Practices Act of 1974.

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