Google Not Liable in Adwords Case – What does it mean to Local?

Barry Schawrtz reported out in SearcheEngineLand about a recent Court decision that held that Google Is Not Liable For Bad Products Sold Through AdWords. Here is a more detailed summary of the case from MediaPost: 

A federal judge has dismissed a lawsuit against Google for allegedly displaying fraudulent ringtone ads.

District Court Judge Jeremy Fogel in San Jose ruled that the federal Communications Decency Act immunizes Google from liability for pay-per-click ads created through the AdWords platform.

“Providing third parties with neutral tools to create Web content is considered to be squarely within the protections of (the law),” Fogel wrote. “Even if a service provider knows that third parties are using such tools to create illegal content, the service’s provider’s failure to intervene is immunized.”

Let me repeat that: “Even if a service provider knows that third parties are using such tools to create illegal content, the service’s provider’s failure to intervene is immunized.” Hello? Since when are accessories to a crime, not culpable? 

This outcome pertains directly to the reality that Google has created in Local. The specifics are slightly different in Local but the implication is clear. Think about what it means if this logic were to apply to Local business listings: Google, even if they knew of illegal hijackings of business listings that caused losses to business owners and even if they had not taken action to stop the hijackings, would be immune from any legal responsibility in the matter. 

In the current banking debacle, we have re-learned what happens when the fox is allowed to guard the henhouse. The Communications Decency Act seems to create a similar unregulated and wild west situation in Local. If the outcome of this act is to immunize the likes of Google from profiting from illegal activities then we have come to a sorry state, indeed.

In October I wrote an article at SearchEngineland about the continued hijackings due the community edit feature. I blithely advised in the article that business owners should Claim Your Google Local Business Listing Before Someone Else Does! and noted that only by laying claim to your record could you prevent hijacking abuse and potential thefts of your income. But the reality is much worse than that. Hijackings are still occurring, even on claimed listings. Thus we are all vulnerable to theft of services even if we have followed best practices as recommended by Google.

Historically, in our society, there has always been recourse in this type of situation. It appears that in the new age of the Internet, the Community Decency Act and Local Business listings, this may not be the case. Caveat Emptor!

Please consider leaving a comment as your input will help me (& everyone else) better understand and learn about local.
Google Not Liable in Adwords Case - What does it mean to Local? by

8 thoughts on “Google Not Liable in Adwords Case – What does it mean to Local?”

  1. I’m not dusting off my tinfoil hat or anything but I think this points to a serious problem.

    As more users migrate away from Yellow Page and they turn the focus of their buying searches to Google and so many 3rd parties find value in controlling the conversion, there is an inherent responsibility and conflict.

    I mean, Google is becoming Media (with a big M) – it’s not just the lack of competitiveness online that’s worrisome, it’s the offline as well.

    If they, who are the ultimate monetizers have no liability, we who need the business they bring are forced to rely on 3rd party distribution channels who are becoming the trusted feeds…

    …whether or not those 3rd parties have our best interests at heart.

    The data and SMB aggregators will always be focused on controlling the conversion and increasing switching costs.

    I want an opportunity for the little guy to succeed and if Google has no liability relative to intentional inaccuracy then we have a serious problem.


  2. One doesn’t need a tin foil hat….there is no conspiracy here…just laws written by big companies to protect big companies….

    Certainly if the action occurs without Google’s (or whomever’s) knowledge and they take it down promptly, it is one thing. But to have immunity even after they know of crime and do not act that is something else…..


  3. I need to read the actual court opinion, but my gut tells me the decision will not stand in light of past case precedence in similar fact patterns.

    Republishing libel after being put on notice takes you immediately out of the protection of the law.

    So my guess is that this is round one and that the federal judge was basically summarily adjudicating the case based upon the information he had.

    It could be that the responding party failed to meet their burden by showing Google was on notice it was libel.

  4. BTW. I realize that libel and fraud are two different things. Here the argument was that Plaintiff was a third party beneficiary of the contract between the seller and Google.

    But the point I was making, is that republishing fraud should be illegal just as defamation is.

  5. I fail to see why you view this as a bad legal decision. Besides being squarely within the law, it would be ridiculous to hold Google liable for something an advertiser does long after the initial ad-click. Should any newspaper that ever ran an ad for a local grocery store be potentially liable if the grocery store one day sells expired meat, or dismisses an employee unfairly? Obviously not, and to hold a search engine liable for the actions of every advertiser is a very slippery slope.

  6. CJ

    I don’t necessarily view it as a bad legal decision as much as bad outcome that is a result of a bad law.

    The issue for me is that once Google (or whomever) knows that it is being used for illegal purposes and it DOES NOTHING and the illegality continues, that they should retain immunity.

    Certainly a 3rd party website can not reasonably be held responsible for the activities of all the users all the time. But once illegal actions have taken place on that website due the design of the website, then there should be some legal obligation incurred and not immunity.

    In the case of Local, when listings are being hijacked and used to illegally divert income from the business owner via Google, should Google not have a legal obligation to fix the hijacked listing immediately? Should they not have a liability if they don’t? Should they be immunized if they continue to allow these hijackings even when they know that they are illegal and they have not put in place any system to properly prevent these hijackings?


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