Crucial lessons from ACCC win in misleading or deceptive Google Ads case

Be careful when relying on algorithms and AI 8 min read

The Full Federal Court has upheld an appeal by the Australian Competition and Consumer Commission relating to the use of Google Ads by Employsure Pty Ltd, finding they gave the impression that its employment advice service would be provided by a government agency, rather than a private company.

ACCC v Employsure Pty Ltd is an important reminder to be cautious when relying on features such as algorithms or artificial intelligence to create content or generate messages.

Key takeaways 

• Exercise care when employing 'dynamic keyword insertion' as a part of a Google Ads campaign. Keywords may be effective in targeting a particular audience but can risk providing inadequate information to accurately promote the supply of your product or service. In this case, the association of keywords in the advertisements was too closely affiliated with government services.
• Do not rely on less prominent features of a publication to remediate misleading or deceptive aspects of the advertisements. The audience may not study each feature of an advertisement closely and may absorb only the general message.
• Consider who is the ordinary or reasonable member of the target audience for the advertisements: what do they know and what are they expected to know?
• Remember that the intention behind an advertisement will not affect whether it is likely to mislead or deceive.

Background

On 13 August 2021, the Full Federal Court upheld an appeal by the Australian Competition and Consumer Commission (the ACCC) in relation to the use of Google LLC's advertising service, Google Ads, by workplace relations advisor Employsure Pty Ltd.¹

Between August 2016 to August 2018, Employsure's Google Ads appeared in response to Google searches for keywords such as 'Fair Work Commission', 'Fair Work Australia' and 'Fair Work Ombudsman', and contained headlines such as 'Fair Work Ombudsman Help – Free 24/7 Employer Advice'.

The ACCC commenced proceedings in the Federal Court. In these proceedings, reported previously in In Touch, the court dismissed the ACCC's allegations that the Google Ads falsely represented that Employsure was, or was affiliated with, a government agency.

The Full Federal Court unanimously overturned this decision, finding that Employsure's Google Ads gave the impression that its employment advice service would be provided by a government agency, rather than a private company. This led to the conclusion that Employsure had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive.

The Google Ads service

The Google Ads service allows advertisers to create 'paid' search results that appear when a user of the Google search engine enters particular keywords (specified by the advertiser) as part of their search terms. Google Ads appear alongside 'organic' search results (results generated by Google's proprietary algorithm that best 'match' the relevant search terms input by the user). While Google Ads appear in search results alongside organic search results, they usually appear at the top of a search results page. There can be some variation in how Google Ads are displayed, depending on a user's device (eg computer, smart phone or table) and browser software (eg Chrome, Firefox or Edge). However, generally the word 'Ad' is displayed alongside the paid search result.

A further feature of the Google Ads service, known as 'dynamic keyword insertion', can be adopted by an advertiser to automatically update its paid advertisement text to include keywords based on the search terms entered. The effect of this is that the same advertisement may appear differently to users depending on the specific search terms used.

The ACCC's case against Employsure

At trial, the ACCC alleged that Employsure represented it was, or was affiliated with and/or endorsed by, a government agency, through the publication of seven Google Ads that promoted free employment-related advice services. These were referred to as the Government Affiliation Representations.

The ACCC argued that the Government Affiliation Representations were conveyed by Employsure's Google Ads:

• through the use of phrases such as 'Fair Work Ombudsman', 'Fair Work Australia' and 'Fair Work Commission', all of which were government agencies concerned with workplace relations issues;
• by displaying the URL fairworkhelp.com.au/Fair-Work/Australia directly below the headline of the advertisements;
• by referring to 'free advice'; and
• by referring to its telephone helpline as 'the' advice service, giving the impression that it was the definitive helpline for advice on fair work issues.

While Employsure provided specialist workplace relations advice, it was a private company with no connection to any government agency. It was the ACCC's case that by making the Government Affiliation Representations, Employsure:

• engaged in misleading or deceptive conduct, or conduct that was likely to mislead or deceive, in contravention of section 18 of the Australian Consumer Law (the ACL); and
• made false or misleading representations that its services were of a particular standard or quality (in contravention of s29(1)(b) of the ACL) and that it had government sponsorship or approval (in contravention of s19(1)(h) of the ACL).

Findings at trial

The trial judge dismissed each of the ACCC's claims as to the seven Employsure advertisements.

His Honour had regard to the hypothetical reasonable member of the class of persons in the advertisements' audience, being an ordinary, reasonable business owner, with some knowledge of basic features of the internet and the Google search engine. When Employsure's Google Ads were viewed through this lens, they were not considered to be misleading or deceptive, or likely to be so.

The Full Federal Court decision on appeal

In allowing the appeal, the Full Federal Court set aside the trial judge's orders, granting declaratory relief, and remitting the matter to the trial judge for determination of the questions of the appropriate financial penalty and whether to grant injunctive relief.² 

Principles of law

The Full Federal Court confirmed the following applicable principles concerning misleading or deceptive conduct, and false and misleading representations, which were largely agreed between the parties:

• The trial judge had misstated the relevant test by requiring the ACCC to establish that a 'not insignificant number' of ordinary business owners would have been misled or deceived by the Google Ads.
• The correct test to be applied is whether the representations were misleading or deceptive (or likely to be so) when viewed, as a whole and in context, through the prism of a reasonable member of the relevant class. However, the trial's judge's decision did not turn on this distinction.
• The court must consider the characteristics of the persons in the relevant class to whom the representation is directed and the likely effect on ordinary members of that class. In doing so, the court should disregard extreme or fanciful reactions.
• It is not necessary to prove that there was an intention to mislead or deceive.
• It is not necessary to prove that people were actually misled or deceived.

Findings as to the relevant class of persons

The Full Federal Court agreed that the relevant class of persons was 'ordinary business owners'.

However, it found that the trial judge failed to properly take into account the broad range of persons in the target audience and the range of reasonable responses within that class. The Full Federal Court observed that business owners are 'inherently heterogenous and the characteristics of an ordinary or reasonable class member must take into account its diversity'.³

On that basis, it was still possible for the representations to be misleading, even if they weren't likely to deceive those with high levels of commercial shrewdness.

Salient features of the Representations

Employsure's Government Affiliation Representations were found to be misleading or deceptive, taking into account the following:

• An ordinary business owner may not study Google Ads closely, and only absorb the 'general thrust' of the advertisement.
• The Google Ads gave the misleading impression that advice would be provided by a government agency by:
  • using 'dynamic keyword insertion' so that the language used in particular Google Ads changed in response to particular search terms for government agency keywords;
  • failing to refer to Employsure as the provider of the advertised service;
  • using URLs for the landing pages (fairworkhelp.com.au/Fair-Work/Australia' and 'www.fairworkhelp.com.au/Fair-Work/Commission) that could be understood to be links to the official government websites, and not a private company; and
  • offering free help or advice, as it would not be unreasonable to think that government agencies offer free help or advice, whereas private companies typically do not.
• It was not unreasonable for the ordinary business owner to overlook less prominent indicia, such as:
  • the symbol for 'Ad', which appeared in the second lines of the Google Ads;
  • the use of a '.com' as opposed to a '.gov' domain; and
  • the 'organic' search results that followed the Google Ads, which were in fact tied to the correct government agencies. As the Google Ads appeared as the first result on the page, it was reasonable for an ordinary business owner to click on them and look no further.

What's next?

ACCC v Employsure exemplifies the difficulties of applying existing and accepted legal principles to rapidly developing aspects of society, particularly when complex technologies are involved. While Google Ads have been a feature of many internet users' daily interface for years, this decision is an important reminder to exercise caution when relying on features such as algorithms or artificial intelligence to create content or generate messages that are open to (mis)interpretation.