IP Bite: Employsure Google Ads case continues - ACCC seeks tougher penalty on misleading paid advertisements - Lexology

Australian Competition & Consumer Commission v Employsure Pty Ltd (NSD20/2022)

What you need to know

• In November 2021, the Federal Court imposed a $1 million penalty on Employsure Pty Ltd for making misleading representations in their Google Ads advertisements.
• The ACCC has filed an appeal against the penalty judgment, on the basis that the $1 million penalty ordered is "manifestly inadequate".

What you need to do

• If your business uses online advertising, review your search engine marketing strategy to ensure compliance with the Australian Consumer Law.
• Monitor the search terms and dynamic keywords of your online advertisements and consider whether they give a misleading impression that your business is a government agency or is affiliated with the government in any way (if that is not the case).

The proceedings so far

Employsure Pty Ltd is a private company which offers workplace relations advisory services to employers and business owners across Australia.

In 2018, the ACCC commenced civil proceedings against Employsure, alleging that it engaged in misleading conduct in breach of the Australian Consumer Law through its use of Google Ads campaigns in 2016–2018. The Google Ads advertisements in question featured headlines such as "Fair Work Ombudsman Help – Free 24/7 Employer Advice" and "Fair Work Commission Advice – Free Employer Advice", and they also appeared in response to search terms such as "fair work ombudsman".

At first instance, the Federal Court dismissed the ACCC's case and found that Employsure's Google Ads advertisements did not mispresent to small businesses that Employsure was, or was affiliated with, a government agency. This decision was overturned by the Full Federal Court in August 2021. The court imposed a penalty of $1 million on Employsure for breaching sections 18 and 29 of the Australian Consumer Law.

Appeal against the $1 million penalty

The ACCC initially sought a penalty of $5 million on the basis that a strong deterrence effect was needed. It has since filed an appeal against the $1 million penalty judgment on the basis that it is "manifestly inadequate", having regard to the nature of the conduct and the size and financial position of Employsure.

What does this mean for online advertising?

The ACCC's decision to appeal the penalty judgment indicates that the regulator is adopting a tougher stance on internet advertising practices.

One of the ACCC's enforcement and compliance priorities for 2022-2023 is to monitor "consumer and fair trading issues relating to manipulative or deceptive advertising and marketing practices in the digital economy".

This means that the ACCC will be more likely to consider enforcement actions where it believes there has been misleading or deceptive online advertising, particularly if it is published by large businesses and/or has the potential to cause detriment to consumers and small businesses in Australia.