Legal Insights

Lessons in Google advertising: Court confirms Employsure’s ads were misleading

By Shaun Temby & Brigitte Challis

• 23 November 2021 • 5 min read

A recent Full Federal Court decision in favour of the Australian Competition and Consumer Commission (ACCC) confirmed the need for caution when businesses design and utilise Google Ad words and other search engine optimisation techniques for advertising campaigns. Repercussions for businesses adopting an overly aggressive use of Government Department names, in hopes of grabbing the attention of consumers, are only likely to increase given the growing popularity as a key advertising medium and the ACCC's focus on the regulation of search engine advertising.

Background

Employsure is a private company offering employment relations and work health and safety advisory services to businesses on a long-term contract basis with ongoing fees. Between 2016 and 2018 Employsure published Google Ads which featured wording such as ‘Fair Work Ombudsman Help – Free 24/7 Employer Advice’ and ‘Fair Work Commission Advice – Free Employer Advice’ and displayed the URL ‘fairworkhelp.com.au/Fair-Work/’ (Advertisements or Ads).

The Advertisements also referred to a free advice service, a helpline whereby Employsure would offer free advice and try to secure leads to sell Employsure’s paid services. Consumers were exposed to the Advertisements when using Google to search for terms such as ‘fair work ombudsman’ and ‘fair work commission’.

The ACCC received over 100 complaints from small businesses and other consumers who contacted Employsure after viewing one of the Advertisements and thought they were dealing with a government agency. Ultimately, some of those parties signed up to long-term contracts with Employsure that had significant ongoing fees. Subsequently, the ACCC commenced proceedings against Employsure in the Federal Court alleging that the Advertisements falsely represented that Employsure was, or was affiliated with, a government agency and were therefore misleading or deceptive in breach of the Australian Consumer Law.

The original decision

The Federal Court originally dismissed the ACCC’s allegations, finding that a reasonable business owner would not infer that there was any affiliation with a government agency. The Court’s reasoning included that Employsure’s URL included a ‘.com’ rather than a ‘.gov’ suffix and that ‘fair work’ has a broad descriptive meaning, that is not confined to government usage. Further, the Court found that a reasonable business owner would appreciate that the helpline was operated by a private company and accordingly was likely to have a commercial purpose.

The Full Federal Court

The ACCC appealed to the Full Federal Court which found in the ACCC’s favour holding that the Advertisements suggested Employsure’s advisory services would be provided by a Government agency rather than a private company. In overturning the trial Judge’s decision, the Full Court found that the trial Judge had applied the incorrect legal test when determining whether the conduct was misleading or deceptive and gave disproportionate weight to certain features of the Advertisements. While the trial Judge considered that the ACCC needed to establish that a ’not insignificant number‘ of the relevant class of persons (in this case, ordinary business owners) would have been misled or deceived by the Ads, the correct approach is to view the representations as a whole and through the lens of a reasonable ordinary business owner.

The Full Court took into account the following features of the Ads:

  • A person may not have studied the Advertisements closely and may only have given them a fleeting glance and absorbed their ’general thrust‘. Persons viewing the Advertisements may not always be sophisticated and may in fact be somewhat gullible, are not well-educated or have a limited grasp of the English language.
  • The prominent headline of each of the Advertisements advertised free ‘help’ or ‘advice’ and then associated that offer with a named major Government agency. The headline also failed to mention Employsure or explain that it is a private company.
  • Employsure used ‘dynamic keyword insertion’, whereby the content of the Advertisements changed to match the search terms the consumer entered, such as ’Fair Work Ombudsman’, ’Fair Work Commission’, and ‘Fair Work Australia'. This gave the impression that the help or advice would be provided by that agency.
  • The fact that the help or advice was promoted as being free supported the impression that the advice would be provided by a Government agency and it would be reasonable for consumer to assume that commercial organisations do not generally offer free advice.
  • The URLs ‘fairworkhelp.com.au/Fair-Work/Australia’ and ‘fairworkhelp.com.au/Fair-Work/Commission’, which appeared prominently below the headline, supported the impression that the free advice would be provided by the Government agency named in the headline.

The proceedings will now go back to the Federal Court for it to determine the appropriate penalty and whether to grant injunctive relief to the ACCC.

What does this mean for use of Ad words?

The issue was first considered by the Full Court in 2011, when the ACCC won a landmark victory against the Trading Post, when Google Ads were a much newer concept. In that earlier case, the Federal Court found that the Trading Post had made false or misleading representations and engaged in misleading or deceptive conduct by using a competitor’s keywords. The Trading Post’s conduct meant that a consumer searching for that competitor would also be shown a prominent (ie top of page) advertisement for the Trading Post. In response to the Trading Post proceedings, Google has changed its practices (releasing a ‘Business Names Policy’) to prohibit the use of unrelated business names (which, in our view, includes government bodies) in the first line of Google Ad text.

Implications of the Full Court’s decision and key takeaways

While Employsure appears to have also breached Google’s current Business Names Policy, it is not clear whether it breached the Policy in place at the time and, if so whether Google took any action in response to that breach. Its significance is underscored by the ACCC’s inquiry into digital advertising services. It is clear from this inquiry and the ACCC’s Court wins against the Trading Post and Employsure that businesses that publish misleading Ad words that suggest an association where one doesn’t exist will breach the ACL. Accordingly, businesses should:

  • take care to ensure that key words are appropriate and sufficient to reach the intended target audience, but are not likely to mislead consumers as to who is covered by the Ads or what the consumer is clicking on
  • consider the education, sophistication and circumstances of their intended audience
  • be particularly careful when adopting and using ‘dynamic keyword insertion’ and other algorithms and artificial intelligence tools to create misleading impressions in the minds of consumers.

By Shaun Temby & Brigitte Challis

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