EightBlack.

Now, this has to be the most insane thing I’ve heard for a while. It’s hit the airwaves all over the place. Here and here for a start.

When I first read it, I thought - oh, it must be an April Fools’ joke. But then I thought, (no matter how jet-lagged I am at present), that we are in July. Nope, cant be that then.

Here’s the crux of it.

The ACCC - the consumer watchdog in Australia is pissed at Google and the Trading Post. And it has, in its’ wisdom, decided to “make a jolly good example” of both these upstarts and take them to court. And while they’re at it, demand legal costs.

From the ACCC website:

The ACCC is alleging that Trading Post contravened sections 52 and 53(d) of the Trade Practices Act 1974 in 2005 when the business names “Kloster Ford” and “Charlestown Toyota” appeared in the title of Google sponsored links to Trading Post’s website. Kloster Ford and Charlestown Toyota are Newcastle car dealerships who compete against Trading Post in automotive sales.

The ACCC is also alleging that Google, by causing the Kloster Ford and Charlestown Toyota links to be published on its website, engaged in misleading and deceptive conduct in breach of section 52 of the Act.

Further, the ACCC is alleging that Google, by failing to adequately distinguish sponsored links from “organic” search results, has engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Act.

The ACCC is seeking:

• declarations that Trading Post contravened sections 52 and 53(d) of the Act
• declarations that Google contravened section 52 of the Act
• injunctions restraining Trading Post from representing through sponsored links an association, sponsorship or affiliation with another business where one does not exist
• injunctions restraining Google from publishing sponsored links of advertisers representing an association, sponsorship or affiliation where one does not exist
• injunctions restraining Google from publishing search results that do not expressly distinguish advertisements from organic search results
• orders that Trading Post and Google implement trade practices compliance programs
• an order that Google publish a notice on its website outlining the above, and
• costs.

The matter has been listed for a directions hearing in the Federal Court, Sydney, on 21 August 2007 before Justice Allsop.

This is the first action of its type globally. Whilst Google has faced court action overseas, particularly in the United States, France and Belgium, this generally has been in relation to trademark use. Although the US anti-trust authority the Federal Trade Commission has examined similar issues, the ACCC understands that it is the first regulatory body to seek legal clarification of Google’s conduct from a trade practices perspective.

Has Graeme Samuel, the head of the ACCC, lost his freaking mind???

Maybe this happened. Maybe Samuel and a few of his colleagues were around at his place on the weekend and at around 3am, as he was fumbling around in the cellar for a ‘73 Grange (why by the way do you always drink the most expensive grog when you are either too drunk to know better, or worse, your mates are all on the verge of passing out). I digress. Sorry.

Anyway, so he’s fumbling around in the cellar and then he shouts to the people still awake “Hey, shit, here’s a good idea. Lets take Google and the Trading Post to court”. Or something like that.

Google’s corporate counsel in the US must be shaking in their boots.

Here’s what I predict will happen. It will get tossed on day one. And Samuel and his consumer watchdog will be about as intimidating as a neutered chihuahua.

I don’t even reckon it will make Kent Walker’s inbox. Kent by the way is Google’s Head Legal Counsel. From his bio, (he’s ex eBay, Oracle and Netscape)

Earlier in his career, Kent was an Assistant U.S. Attorney with the United States Department of Justice, where he specialized in the prosecution of technology crimes and advised the Attorney General on management and technology issues.

Google is no stranger to litigation. You have to expect it when you are the hottest technology company on the planet. The Federal Trade Commission has had a crack at the search giant, so have some wayward folks in France and Belgium. In all cases, guess who really won. Ok, Google may have been “slapped on the wrist” and forced to pay a small fine in a few of these cases, but in the end, they didn’t have to make the far reaching fundamental change(s) to their core business model that the ACCC is demanding they do. (The AFP statement is here and Danny Sullivan has detailed coverage of the Belgium case details here).

God, I hope Battelle or Scoble weigh in on this. It’s just madness.

Let me try and be rational for a moment and talk about one of the real issues at hand.

The ACCC believe “that Google, by failing to adequately distinguish sponsored links from “organic” search results, has engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Act.”

The fact that Google actually displays “Sponsored Link” at the top of the page (above the organic results) and to the right is obviously not clear enough. Not to the ACCC anyway. Google even highlight the sponsored link section above the organic results in a shaded colour in many instances.

Google has changed its stance on trademark since its launch here. For example, online travel sites used to bid on the keyword “Qantas” as a part of their adwords strategy. It made sense. Qantas, as it had a right to do, complained to Google and now, the travel sites can no longer bid on trademarked names - like Qantas, Virgin Blue, Jetstar etc.

Look at this screenshot below. Can you not see “sponsored link”. Twice. At the top of the page. I even worked out how to use the “circle” function in paint when I inserted the image. Sorry about the clarity of the image - click on it and you’ll see what I’m talking about.

Google has clearly complied with not only making it crystal clear regarding sponsored and organic listings, but also with reference to trade-mark.

This is one case I’m going to follow for a while now. It’s also one case where I truly hope Richard Kimber, the head of Google in Asia Pac calls up Sol Trujillo, Telstra’s gun slinging CEO and the ultimate head of Sensis (the owner of the Trading Post) and combines their legal might and legally belts the crap out of the ACCC.

Wait till Phil Burgess, Telstra’s Group Managing Director, Public Policy and Communications gets a hold of this. Burgess in full flight makes Idi Amin look restrained.

It’s just nonsense. The case on its multiple points, has no legal merit (and I’m no lawyer). All it will do will ensure that the partners of the top law firms are able to have a very expensive and lavish Xmas party somewhere overseas now (instead of locally).

And Graeme Samuel may well end up learning how to create a profile on Seek.com.au.

Over to you now…

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This entry was posted on Thursday, July 12th, 2007 at 10:07 pm and is filed under Google, News, Sensis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.