Well not exactly, but more or less.

The Australian Competition and Consumer Commission (ACCC) is taking legal action against Google to stop them publishing search results that fail to distinguish between paid advertising and natural search results.

“The ACCC is alleging that Google, by failing to adequately distinguish sponsored links from ‘organic’ search results, has engaged in and continues to engage in misleading and deceptive conduct,” the regulator said in a statement.

The specific complaint is detailed in a statement on 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.

They are talking about the sponsored links that appear at the top of the search results in the pale yellow box.

I can’t see how anyone wouldn’t realise that this is an ad? Maybe if you are colour blind.

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.

There is no known worldwide legal precedent for this case. I really don’t like their chances much. Good times for the Google lawyers though, they must be making some serious cash at the moment with all the litigation pending against the search giant.