ACCC appeals $1m penalty in Employsure Google ads case
UPDATE: The ACCC has filed an appeal against the $1 million penalty ordered by the Federal Court against Employsure for making misleading representations that it was, or was affiliated with, a government agency, in Google ads published between August 2016 and August 2018.
Employsure published six misleading Google ads which appeared in response to searches for terms like ‘fair work ombudsman’, ‘fair work commission’ and similar terms and featured headlines like ‘Fair Work Ombudsman Help – Free 24/7 Employer Advice’.
“We were concerned Employsure’s Google ads potentially misled thousands of Australian businesses over a two-year period into contacting Employsure, thinking they were dealing with a government agency, or one affiliated with the government,” ACCC deputy chair Mick Keogh said.
“Any attempt to misrepresent a business as being part of the government is a serious breach of trust, and of our consumer laws.”
The ACCC had sought a penalty of $5 million, and is appealing from the penalty judgment on the basis that the $1 million penalty ordered is manifestly inadequate.
“We believe a higher penalty is necessary and appropriate having regard to the nature of the conduct and size of Employsure, to ensure that internet advertisers are sufficiently deterred from misleading consumers about who they are dealing with,” Keogh said.
A hearing for the appeal before the Full Federal Court will be fixed at a later date.
Background
Employsure is a large, private company with offices in Sydney, Melbourne, Brisbane and Perth that offers employment relations and workplace health and safety advisory services to business owners. In the 2021 financial year it had more than 23,500 clients. It has no affiliation with any government agency.
The ACCC instituted proceedings against Employsure in December 2018, alleging Employsure misled consumers that it was, or was affiliated with, a government agency, through its Google Ads published on Google search results pages.
In October 2020, the Federal Court dismissed the ACCC’s case.
An ACCC appeal was unanimously upheld by the Full Federal Court in August 2021, finding that Employsure had misled consumers by claiming to be affiliated with a government agency when it was not.
During the period from August 2016 to August 2018, Google Ads were displayed that contained these representations and included headlines such as ‘Fair Work Ombudsman Help – Free 24/7 Employer Advice’ and ‘Fair Work Commission Advice – Free Employer Advice’.
As a strong deterrence measure, and given that Google Ads were published over a prolonged period, the ACCC recommended a penalty of $5 million.
The court imposed a penalty of $1 million based on Justice Griffiths’ earlier finding that the conduct was not deliberate, accepting Employsure’s evidence that by the time a consumer signed up with Employsure, “its internal processes meant consumers should have been aware that the services were provided by Employsure, and that it was not affiliated with or endorsed by the government.”
“We consider that misrepresenting a business as being part of, or affiliated with, the government is a particularly serious breach of our consumer law, and publication of the Google Ads, including over a prolonged period of time, points to a significant compliance failure,” ACCC chair Rod Sims said.
“The ACCC took this action following over 100 complaints about Employsure, including from small businesses who claimed they had contacted Employsure after viewing a Google Ad and thought they were dealing with a government agency.”
“The ACCC was particularly concerned that consumers may have entered into contracts with Employsure for a significant fee because they believed the advertised services were to be provided by the official government authority, or a government affiliate, but this was not accepted by the Court in determining the penalty,” Mr Sims said.
Furthermore, the ACCC sought a restraining order against Employsure to prevent it from misrepresenting that it is an affiliate of the government in the marketing and provision of its services. The judge did not find an injunction appropriate since the conduct ended more than three years ago, and it was unlikely to recur, in his view.
ACCC timeline against Employsure
- The ACCC instituted proceedings against Employsure in December 2018, alleging Employsure misled consumers that it was, or was affiliated with, a government agency, through its Google Ads published on Google search results pages.
- In October 2020, the Federal Court dismissed the ACCC’s case.
- The ACCC’s appeal was unanimously upheld by the Full Federal Court in August 2021.
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