Googling the search terms Google and sued reveals many results Google Sued Over PageRank Decrease, Google Sued For Click Fraud, Google sued over defamatory postings,  so on and so forth. It’s not the least bit surprising, given that Google is a multi-billion dollar internet company.

But perhaps the most surprising was the result that read ACCC takes Google to court. ACCC, of course, stands for the Australian Competition and Consumer Commission a government regulatory body which is suing the world’s leading search engine for deceptive advertising practices.

The consumer watchdog alleges Trading Post Australia, Google Ireland, Google Australia and Google Inc. were misleading in the search engine’s Sponsored Links section. In 2005, sponsored links titled Kloster Ford and Charlestown Toyota allegedly appeared on Google, but the links allegedly directed users to the Trading Post website. (Both dealerships compete with the Trading Post.) By publishing the links, Google allegedly engaged in misleading and deceptive conduct.

Google also continues to allegedly fail to distinguish sponsored links from organic search results. According to an ACCC statement: The ACCC understands that it is the first regulatory body to seek legal clarification of Google’s conduct from a trade practices perspective. This is the first action of its type globally.

Google, naturally, hotly denied their alleged misconduct, calling it an attack on all search engines.”

The suit does raise significant questions about commonly accepted search advertising practices, given that this is a government suit, and that ACCC is the first regulatory body to seek legal clarification of Internet giant’s conduct from a trade practices perspective. The other court cases Google is currently embroiled in are only in relation to trademark use.

If the Australian government forces Google to police its ads, it could strike a harsh blow to Google’s business in that country  and other countries, especially in Europe, would be tempted to follow suit, wrote Greg Sterling in Publishing 2.0. Google was able to let a lot of this advertising malfeasance get swept under the rug until now.

The matter will come before the Sydney Federal Court on August 21. It will be interesting to see how all of this plays out.