Employsure fined $1 million by Federal Court for misleading Google Ads
The Full Federal Court recently found in August 2021 that Employsure had made misleading representations that it was, or was affiliated with, a government agency (Australia Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142) during an SEM Google Ad words campaign. Employsure Pty Ltd is private company that advises employers and businesses in relation to the requirements of workplace relations and workplace health and safety legislation, and has no affiliation with, or endorsement by, any government agency. These employment services are provided under long-term contracts with on-going subscriptions.
What had Employsure done wrong?
Section 18 of the Australian Consumer Law (ACL), contained within Schedule 2 of the Competition and Consumer Act 2010 (Cth), prohibits misleading or deceptive conduct. Furthermore, s29(1)(b) of the ACL prohibits false or misleading representations as to particular quality or standard of services, and s29(1)(h) prohibits false or misleading representation as to the sponsorship, approval or affiliation of services. Following a successful defence in the Federal Court below, the Judges in the Full Federal Court established the central question in the Appeal being as to whether the conduct or representations had sufficient tendency to lead a person into error, considered as a whole and in context.
From August 2016 to August 2018, Employsure had published advertisements that promoted its free employment-related advice service in response to google searches such as “fair work commission”, “fair work Australia”, “fair work”, “fwc” and “fair work ombudsman”. Employsure also employed “dynamic key word insertion”, a feature that dynamically updates the displayed advertisement text to include one or more of the keywords from the user’s search terms. Directly below the headlines was the URL www.fairworkhelp.com.au/Fair-Work/Australia, and the advertisements referred to ‘free advice’. The advertisements had no indication that they were provided by or related to Employsure. In December 2018 the ACCC instituted proceedings against Employsure following over 100 complaints. Employsure argued, alongside other evidence, that the ‘.com’ domain, as opposed to ‘.gov’, and the indication that it was an ‘Ad’ would have indicated to a person that it was not a government agency. The Federal Court dismissed the ACCC’s case in October, however the ACCCs appeal was successful and the Full Federal Court unanimously ruled in favour of the ACCC in August 2021.
Legal Problems with the Google Ad included:
Neither the headline nor the URL underneath indicated the services were being provided by Employsure.
- The use of dynamic keyword insertion for searches of government agency keywords made the headline look like the service was being provided by a government agency.
- The URL and the offer of free advice are more likely to be from a government agency than a private company.
The penalty
Justice Griffiths ordered Employsure to pay a pecuniary penalty of $1 million on the 29 November 2021 (Australia Competition and Consumer Commission v Employsure Pty Ltd (No 2) [2021] FCA 148). The ACCC recommended a penalty of $5 million as a strong deterrence measure and because the ads were published over a prolonged period. However, Griffiths J considered a variety of factors, including that the maximum penalty for the relevant contraventions was $1.1 million during the period the ads were functioning, and the lack of intent to mislead, deceive or misrepresent. Whilst a lack of intention did result in lower costs than the ACCC recommended, it is not a defence to s18 or s29 breach of the ACL.
Key takeaways:
- Make sure any Google or other search advertisements indicate who is providing products or services
- Take care when using Google Ad services such as keywords, particularly dynamic keyword insertion, that may create unintended and misleading consequences
- Factors like the domain, the ‘Ad’ symbol and other organic search results underneath were not sufficient to make the advertisement not misleading
Von Muenster Legal is always happy to assist with any of your advertisement queries at info@vonmlegal.com