Liability for Search Engines Continues to Expand

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Two recent decisions from the Courts of Australia have highlighted the increased exposure to liability that online service providers face as individuals and businesses try to find new ways to prevent false and defamatory content about them from being propagated online.  Both Australian cases involve the online giant Google and how its automated systems display search results.  In the first case, Google was found to have breached Australia’s unfair competition laws by displaying false search results generated by Google Adwords.  In the latest case, Google was found liable for online defamation.  Both cases have important ramifications for how similar cases might be decided by a Canadian Court.  

In an a unanimous decision from a panel of three judges, the Australian Federal Court ruled that Google had engaged in misleading advertising, contrary to Australia’s Trade Practices Act (akin to Canada’s Competition Act), when it allowed advertisers to use competitors’ trade-names as Adword keywords which then triggered their own advertisements.  The provisions of that law at issue (which has since been repealed and replaced with new legislation) stated that it was unlawful for a business to engage in conduct that is either misleading or deceptive or likely to mislead or deceive.  Google’s main defence to this charge was that it was only a passive (and therefore innocent) conduit for the activities of the advertisers in question (who had all been found liable in earlier proceedings).  It was therefore Google’s position that, as an ad hosting platform, only the advertisers that misuse the Adwords system should be held to account.  After all, Google argued, it was the advertisers that put in place the Adwords which turned out to be deceptive, not Google.  

The Court, however, rebuffed Google’s arguments in their entirety, and found that Google was no mere passive conduit for the advertisers’ activities.  This finding, which was key to the whole case against Google, was in turn based on several findings of fact made by the judges, which included: 1) The content that appears on a Google webpage in response to a user’s query is Google generated content.  More specifically, it is the computer program that Google employs that generates the search results page, pursuant to the Adwords facility that is made available to the advertisers by Google; 2) An ordinary and reasonable user of Google’s search engine would conclude that it was Google that displayed the advertisers’ sponsored links in response to the user’s search query.  Critical to this finding was also the fact that what occurs when a user executes a Google search is that a) the user is asking a question of Google, and b) the search results (whether misleading or not) are Google’s response; and 3) the conduct in providing a URL in response to a search query (which in turn leads to the advertisers’ website) is Google’s.  In all, the falsity of the conduct engaged in by Google is that, in response to a searched term which identifies a competitor, it is Google that displays the misleading URL in its sponsored link search results.  This is, the Court concluded, very unlike the typical case of a passive advertiser who simply disseminates words and images as an agent of its advertising client (which would generally not attract liability), simply because it is Google (more accurately its computer program) that created the message that it then represents.  

This notion, that Google cannot simply escape liability by portraying itself as a “passive conduit” in what information its search engine displays in response to certain search queries, was also accepted by the Supreme Court of Victoria when a jury, and then a judge, found Google liable for having defamed a prominent Australian show business manager.  In short, when users searched the plaintiff’s name using Google, Google returned search results that (incorrectly) linked the plaintiff’s name and likeness with organized crime in Australia.  The plaintiff’s lawyers wrote to Google asking them to rectify this error, and Google acknowledged this letter, but refused to act, citing its policies concerning content removal.  And so, the plaintiff sued.

Google’s primary defence was that it could not be considered a publisher of the defamatory statements, and that it was, at worst, an innocent disseminator of these statements.  However, given that Google was put on notice of the defamation, and was thus aware that its search engine was returning these defamatory results, the judge found that the jury was correct in its finding that Google was liable to the plaintiff.  Even in the absence of such notice, the judge was also of the opinion that, because the search results complained of were in fact of Google’s creation, Google would have been held liable as the publisher of those defamatory search results in any event.  Finally, the judge also rejected Google’s argument that it was an “innocent disseminator” because, at law, this required Google to show that it a) it did not know that the statements complained of were defamatory and b) that it did not, or could not reasonably have known, about the matter.  Again, given that Google was clearly put on notice by the plaintiff of his potential claim, Google could not avail itself of this defence.  As a result, the judge ordered Google to pay damages in the amount of $200,000.  

Given that Canada and Australia share the same common law tradition, it is possible that a Canadian Court could one day find Google liable in similar cases.  The key element to take away from all of this is that, the failure of an entity with the power to stop publication after a reasonable time of receipt of notice can lead to the inference that the entity consents to that publication.  In other words, Google, or any other search engine or service provider for that matter, cannot simple claim that the services they offer are simply passive, and escape liability in that fashion:  given the right set of circumstances, they can be considered publishers of the content they display, and be held liable.  Therefore, in any such future Canadian case, a finding of liability against a search engine provider, for either false advertising or defamation, will depend on the particular facts of that case.  Certainly, if a prospective plaintiff first puts Google on notice of their potential claim, then, based on these cases, Google may chose to ignore such a complaint at its peril.

James Katz is an Associate with the law firm of BrazeauSeller.LLP. He practices in the areas of litigation and intellectual property. James can be reached at 613-237-4000 ext. 267 or at jkatz@brazeauseller.com. For more information about James, please visit www.brazeauseller.com.

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