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Moola cartel court ruling a warning to businesses using Google Ads

(Source: Bigstock.)

A High Court ruling in a case involving the Commerce Commission has significance to all companies using Google Ads to promote products or services. 

The court granted declarations sought by the commission that Moola Limited – a consumer finance company providing high-cost short term loans of up to $5000 operating through its websites moola.co.nz and needcashtoday.co.nz – engaged in cartel conduct relating to online advertising.

Moola had entered into agreements with rival consumer credit or loan providers to not bid on each other’s brand names on Google Ads and agreed to ‘negatively match’ certain keywords so that their advertisements would not show when those keywords were used. 

The commission filed proceedings against Moola back in July, seeking declarations that entering into and giving effect to the agreements breached the cartel provisions of the Commerce Act 1986.

Moola has been co-operating with the commission’s investigation, has accepted that it contravened the Act, and has also agreed to declarations being made by the court.

The commission’s chair, Anna Rawlings, says such conduct resulted in consumers who were searching for a consumer credit provider on Google might not see ads for rival loan providers, which had the effect of limiting their access to information about alternative companies and services. She says this likely reduced the ability of consumers to make informed choices when selecting a loan provider.

“Competitive keyword advertising is important for businesses and consumers alike. It allows businesses to have their online ads shown to potential customers at a time when they are actively searching for the relevant products and services, and consumers benefit from obtaining information on competing products and services in response to searches for a particular brand,” she says.

“By restricting competitive keyword advertising, these agreements may have resulted in consumers paying higher prices and acquiring consumer finance services on unfavourable or less suitable terms. The likelihood of harm would have been higher for vulnerable consumers with less experience and knowledge about consumer finance companies.”

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