Google has won its High Court challenge against the decision that it is liable for AdWords-generated search results that mislead or deceive consumers.

By a majority, the court ruled that it is the advertiser, not Google, who makes any false representation contained in an AdWords-generated sponsored link.

The Australian consumer watchdog brought an action against Google for engaging in misleading or deceptive conduct when an AdWords-generated sponsored link wrongly represents an association or affiliation between the advertiser and the advertiser’s competitor whose name or trademark was used as the AdWords keyword.

The Federal Court at first instance agreed that such advertisements amounted to misleading or deceptive representations, but found that these representations were made by the advertiser, not Google.

This decision was overturned on appeal by the Full Court of the Federal Court, on the basis that by returning an AdWords sponsored link in response to a search query, Google represents (misleadingly) that there is a connection between the competitor business for which the user is searching and the advertiser.

The High Court disagreed, stating: “It is critical to appreciate that, even with the facility of keyword insertion, the advertiser is the author of the sponsored link.” Accordingly, it could not be said that Google had engaged in misleading or deceptive conduct by showing the links in its search results.