Australia may be a former penal colony, but it is about to give Google (GOOG) fits that could spread elsewhere.
According to the FT, The Australian Competition and Consumer Commission wants to “restraining Google from publishing search results that do not expressly distinguish advertisements from organic search results”. In other words, the way that Google’s highly successful Adsense text advertising program works is against the law. According to a branch of the Aussie government anyway.
The suit is only interesting because it is aimed at the heart of the system that generates almost all of Google’s revenue. Part of the government’s concern is that it is an unfair trade practice for companies to put text ads next to search results of their competitors.
The suit seems novel, but Australian law on the matter may not be terribly different than it is in the US and the UK. And, the Google ad system can be used as a way for one company to "game" the search results of another.
Will governments elsewhere follow the lead of Australia. It’s hard to say. It did used to be a penal colony.
Douglas A. McIntyre
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