‘Mass media conglomerate’ found guilty of fraud over advertising
Google has agreed to pay $500 million to settle a class action lawsuit alleging that it was negligent in promoting its services in Australia.
The Australian Securities and Investments Commission (ASIC) has ordered Google to pay up to $500m in compensation, plus $10m in interest, after it was found to have breached securities laws.
The class action is named for two Australian women who accused Google of engaging in misleading advertising and promoting its Android and Chrome operating systems on a mass scale through its media properties, which it then used to market its services to consumers.
The ACCC says Google violated Australia’s Corporations Act, which prohibits a company from “advertising, promoting, promoting … or otherwise offering goods or services, or providing goods or benefits, by means of any misleading, deceptive or deceptive conduct.”
It is one of the biggest breaches of Australian law.
Google has not yet responded to the complaint, but it is known to be seeking to appeal the decision.
The plaintiffs claim that Google’s media services were marketed by Google’s own Australian arm, Australian Media Holdings, in which it sold advertising space for its Android operating system and paid Australian publishers to publish articles that were then linked to Google’s search results.
The search giant also paid Australian publications to carry articles that included its own advertising links.
The court found that Google misled the ACCC and the public in Australia about the extent of its market share and its advertising services.
The advertising campaign for Android was promoted by the Australian media group which then paid Google $10 million to promote the same ads.
It was found that the ads were promoted with the purpose of misleading consumers about Google’s services, particularly as it was clear that Google was selling Android advertising space.
Google was also found to be misleading Australian consumers about the availability of its services and about the advertising it paid Australian newspapers to publish.
The company was found not to have registered its Australian operations, as required under the Corporations and Related Persons Act, when it sold its advertising space to the media group.
The case was originally filed in 2012.
The defendants were Google, the Australian Media Group, the ABC, the National Media, Fairfax Media, and the Sydney Morning Herald.