Mark Armstrong, Solicitor and Heidi Bruce, Principal

21 September 2021

Google Ads is an effective way of capturing the attention of a certain audience, and it is tempting to buy up AdWords connected to your competitors, or industry players to help drive the right sort of consumers to your website.  How far can you go with using third party names in your Google Ads strategy and what are the boundaries? This recent case highlights the dangers of blurring the lines between your own brand, and that of an unrelated third party.

In August 2021, the Federal Court found that Employsure’s Google Ads, in using the name of the   Fair Work Ombudsman, was held to breach the Australian Consumer Law (ACL) for making misleading representations that it was affiliated with, or was, a government agency, when this was not the case. Employsure is a private company providing advice to businesses in the workplace sector. The Fair Work Ombudsman is a government body that provides advice about workplace rights and obligations.

The key principle for all advertising is that ads must not mislead consumers.  In this space, advertisers need to ensure that they do not falsely represent an affiliation with a third party.  Does this mean that you can never buy up the names of a competitor, or agency, or third party for a Google Ads campaign, or reference them at all?  There is no hard and fast rule on this and it is not prohibited outright.  However, as this case and a few others show, care must be taken to ensure that strategies used on the Google Ads platform do not falsely represent the nature of your business, or the services offered by your business.  Below we unpack why Employsure’s campaign was held unlawful and how businesses can end up in legal trouble if caution is not taken with Google Ad strategies.

What happened?

Between January 2016 and November 2018, Employsure ran Google Ads which featured headlines including, ‘Fair Work Ombudsman Help – Free 24/7 Employer Advice’, ‘Fair Work Commission Advice – Free Employer Advice’ and ‘Fair Work Australia – Free Fair Work Advice – fairworkhelp.com.au’, which appeared in Google searches for wording similar to ‘fair work ombudsman’ and ‘fair work Australia helpline’.  Significantly, these ads made no reference to Employsure and were designed to attract small businesses requiring employment relations advice.  However, a major problem was that the Fair Work Ombudsman also operates a free helpline where small businesses can receive information and advice on workplace relations issues.  While Employsure did run a free-to-call phoneline, the ACCC alleged that “Employsure’s primary objective was to sign these businesses up to long-term contracts with ongoing fees”.

In response to the ads, the ACCC received over a hundred complaints from people who had seen the ad, contacted Employsure and mistakenly believed they were liaising with a government agency.  In some cases, the advice Employsure offered would have been free of charge from the Fair Work Ombudsman and in three cases, the small business was signed up to a long-term contract for a significant fee.   The ACCC’s Commissioner, Sarah Court, stated, “[A] business must not claim they provide free, government affiliated services in order to lure customers into buying their services” and on appeal, the Federal Court agreed.  The bottom line was that individuals searching for information from a government agency were being diverted away to a company they mistakenly believed was a government agency and ultimately, this was misleading.

Misleading/deceptive conduct, false/misleading representations and the Australian Consumer Law

The ACCC’s case focussed on the key consumer protections contained in the ACL, which is the greatest source of protections afforded to all consumers (including internet searchers).  The two main principles relied on by the ACCC are found in the sections 18 and 29 of the ACL, which hold that a person (including a company) must not, in trade or commerce:

• engage in conduct that is misleading or deceptive or is likely to mislead or deceive; or
• make a false or misleading representation in relation to goods or services.

The judge noted that you do not have to prove that any person was actually misled by the conduct, or that there is an intention to mislead or deceive.  The judge also noted that individuals do not carefully scrutinise ads before clicking on them and concluded that when faced with an ad naming a government agency in the largest typeface, with no reference to Employsure, it would be expected that the information would be either given by a government agency, or at least of a quality expected from a government agency. Accordingly, the judge held that Employsure’s conduct in causing the Google Ads to be published was misleading or deceptive in breach of s 18 and that Employsure’s Google Ads was a false or misleading representation in breach of s 29.

The dangers of Google Ads

This is not the first time a Google Ads campaign has backfired and if advertisers are not careful with their Google Ads strategies, a similar outcome could be on the cards.  In 2011, the ACCC took Trading Post Australia for advertising on Google using keywords not associated with their business. Trading Post purchased the AdWords, ‘Kloster Ford’ and ‘Charlestown Toyota’ from Google, and then incorporated these names into their own sponsored link advertising. How it worked was that for people searching the names of those car dealers, the top search results would be for Trading Post websites and not for the two car dealerships, but not only that, the search results included sponsored links by Trading Post with the headline “Kloster Ford” or “Charlestown Toyota”. When the user clicked on those headlines, they were taken to the Trading Post website.  The court found that the use of keywords in this way misled Google users into believing there was a connection between the Kloster Ford car dealer and Trading Post.  There were evidentiary weaknesses for Charlestown Toyota. This case signified that purchasing trade marks owned by competing businesses could result in legal action from the ACCC for engaging in misleading or deceptive conduct, as well as a legal claim from the owner of the trade mark.

Another potentially dangerous Google Ads feature is its ‘dynamic keyword insertion’ function which involves the automatic updating of the displayed text of an ad to include one or more of the keywords included in a searcher’s search terms.  Employsure opted to use this function, which resulted in terms such as ‘Fair Work Ombudsman’ being included in the headline of the ad itself.  Accordingly, in using this function, Employsure’s ads were automatically adjusted in a way that created the impression that the websites listed were linked with one of the government agencies included in the ad’s headline.

It is clear that this can be what ultimately pushes you into dangerous territory, i.e. when the name of the unrelated third party actually shows up in your own Google ad copy, or headline, as that is what creates the misleading connection for the consumer. We would question whether there would have been any issue, if they had bought the Ombudsman AdWords, but used it only in the background to help deliver their search results, but the name in no way showed up in their ad copy or headline.

It is also clear, that Employsure went too far here in ultimately blurring the lines as to who they really were by aligning themselves with a government agency. Implementing a search strategy involving the buying and using of AdWords in a manner specifically designed to lure individuals away from their intended search destination and towards a different business’ services can be misleading. In Employsure’s case, acting in a way that goes close to the line of impersonating a government agency is, in the words of ACCC Deputy Chair Mick Keogh, “a serious breach of trust and of our consumer laws”.  While Employsure’s exact punishment has not yet been decided, the penalty will be significant, whether it be in the form of a monetary fine or other remedies, as well as the reputational damage.

What does this mean for you?

Cases like this highlight that using a third party’s name in an ad can create a misleading impression, even if it is done automatically.  Having close control over the content of your ads is paramount and ads need to be framed in a way that are not likely to confuse viewers as to the subject matter of the ad or the information or entity behind it.  The fundamental principle is that if an ad is likely to mislead or deceive the general public, it could result in legal action and Google Ad strategies need to be implemented with this in mind.

Contact us

If you would like further information on the above and how it impacts on your business or that of your clients, please contact one of our experts below.

Mark Armstrong                                                                         Heidi Bruce

+61 2 8935 8809                                                                         +61 2 8935 8806

[email protected]                                                 [email protected]