The ACCC is suing Google and one of its advertisers, Australian online shopping portal Trading Post, over the practice of buying adverts next to search terms.
In a recent instance, Trading Post purchased ads next to the search terms 'Kloster Ford' and 'Charlestown Toyota', two of its leading competitors.
The ACCC considered that Google failed to make it clear that these were not 'organic' search results.
"This is the first action of its type globally. While Google has faced court action overseas, particularly in the US, France and Belgium, this has generally been in relation to trademark use," said the ACCC in a statement.
"Although the US Federal Trade Commission has examined similar issues, the ACCC understands that it is the first regulatory body to seek legal clarification of Google's conduct from a trade practices perspective."
The ACCC wants Google to make it much clearer which search results are paid for, as well as an acknowledgement of wrongdoing and full legal costs.
Google has said that it will fight the case in court and described it as an attack on all search engines.
Google's case in Australia could wreck AdWords plans
By Iain Thomson on Jul 16, 2007 6:44AM