Legal battle in New Zealand leaves Google potentially exposed for defamation

September 26, 2012 8:47 am

Google has become entangled in a legal dispute in New Zealand which has raised concerns about Google’s liability for defamatory material and the search giant’s use of its corporate structure to avoid prosecution.
The case was brought by a medical practitioner who alleged material posted on websites and linked to by Google was defamatory and therefore Google, as a publisher, was liable.
New Zealand’s High Court found Google was not liable on the basis that Google New Zealand Limited was not the right defendant as it doesn’t have the requisite degree of control over the search results, which are controlled by Google Inc. in the United States.
“Google New Zealand Limited is not authorised to and has no ability to operate, control, or direct the operation of the Google Search Service,” Justice Abbott found.
The case was brought as a summary judgment application, which is meant to be reserved for cases where there is no real defence or disputed facts and so no need for cross examination, testing of complex conflicting facts or lengthy affidavit evidence.
Justice Abbott found the summary judgment procedure was not appropriate for this type of case and so, without more evidence, he could not consider whether a search engine is responsible as a publisher when it retransmits search results.
He found that there may need to be consideration as to whether there is “a stamp of human intervention” in the way that the search engine program is written, and to address public policy concerns.
“In light of this being a novel point of law and the limited foreign authorities available, it is reasonably arguable that a search engine is a publisher in respect of specific URLs and words…” Justice Abbott held.
“The plaintiff’s concern that removal of specific web pages and deactivation of the hyperlink appears to be an impotent response may turn out to be a matter more suited to determination by legislation.”
John Swinson, partner at King & Wood Mallesons, told SmartCompany that Google’s argument against being regarded as a publisher seemed to be that as there was no human interaction it does not have control.
However, Swinson says the logical conclusion of this argument is that if Google was using a computer to drive a car and the car was speeding it would not be liable.
“In New Zealand it is an open issue as to whether Google is regarded as a publisher and so liable for defamation,” says Swinson.
Instead, the New Zealand case was decided on the basis of whether Google NZ was the correct defendant.
Swinson says Google’s successful defence shows that Google hides behind its corporate structure and has set up a number of subsidiaries, but those subsidiaries don’t operate the search engine.
He says the same issues arise in Australia as Google operates here through Google Australia but Google Australia does not operate the search engine and if there is a complaint it is likely to say the search engine has nothing to do with Google Australia.
“Google Australia is in fact a front that they use for marketing and promotional purposes and government lobbying but takes no responsibility for what Google does on the search engine side and the advertising side,” says Swinson.
“Google gets the benefit of carrying on business in Australia and getting lots of revenue but uses its corporate structure to say that Australian law does not apply and it is US law that applies to Google search.
“It puts businesses in Australia in a difficult position as they have nobody to complain to.”
Swinson says Google is currently appealing the Australian High Court’s decision on Google AdWords, which may provide some guidance on some of these issues.
“In that case the Google entity is participating freely and is not arguing that it does not have control,” says Swinson.

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