Google wins Italian lawsuit over gambling ad ban violations

Google has won its appeal to have a €100,000 (£85,000) fine for illegal gambling advertising overturned after a court ruled the search giant could not be held liable for violating Italian law.

Italian communications watchdog AGCOM first penalised Google for breaching Italy’s Dignity Decree for displaying a paid-for search ad in October 2020.

At the time, the Italian regulator confirmed the fine related to an advert by now-defunct betting website sublime-casino.com on Google’s results page.

Qualifying its decision to fine Google, AGCOM dismissed claims that Google Ads merely served as a hosting service for the advert, suggesting that it was “completely ancillary and technically necessary” to allow the service to be offered and, as such, this was prohibited under the decree.

In response, Google disputed this claim, drawing on the EU’s e-commerce directive in respect of liability, suggesting it could not be liable for the content of the information uploaded by the operator.

In addition, the California-headquartered goliath drew attention to its own automated software which screens out ads violating local laws, something which the Sublime Casino operator had circumvented using a technique called “cloaking”, or bypassing this system.

As part of Google’s ad service, advertisers retain full autonomy over the creation of their ads on the google platform, registering a special account and confirming their acceptance of Google’s advertising standards.

Once the user in question uploads the required message, identifies keywords and categorises the ad, Google software verifies the ad’s compliance with local law before publication. Any ads which do not are automatically excluded from publication.

As soon as this violation was identified, Google suspended the user account belonging to the firm and removed the advert in question.

In considering the case, Lazio’s Regional Administrative Court suggested that the EU’s e-commerce directive, and in particular its “country of origin” principle, allowed AGCOM to levy the fine, since gambling is expressly excluded from the directive.

Also, the court pointed to the lack of specific EU legislation on online gambling and related advertising as allowing the Italian regulator to pursue the fine, while AGCOM’s own guidelines affirmed its ability to fine advertisers not based in Italy for violating Italian advertising law.

However, the court dismissed AGCOM claims that Google was liable for the fine for hosting the operator advert, citing Italian legislative decree 70/2003, specifically clause 16.

This clause states that Google could not be held responsible for the information stored, because the company was not aware it was unlawful in nature, unaware that the operator had circumvented its existing software to store the ad.

In addition, the clause prevents so-called information society services from being liable for the actions of violating advertisers if they act immediately to remove access and information, as Google had done.

Despite it successfully proving these points, the Lazio court dismissed Google’s assertion that the message was lawful because it wasn’t expressly prohibited under the decree, suggesting the Dignity Decree’s general nature applied to all ads including gambling.

The court stated: “The contested sanctioning provision, having held that the manager’s assumption of responsibility derives from the mere ‘stipulation of the contract’ with the advertiser, that is, by reason of the mere diffusion, albeit onerous, of the illicit message, and having excluded that the activity carried out by Google Ads can qualify in terms of hosting, must, therefore, be considered affected, in the attribution of the offence to the applicant by violation of the principles just mentioned, as reconstructed by the Court of Justice, as well as by lack of investigation and motivation.”

The Lazio court has ordered the annulment of the AGCOM fine against Google and ordered the authority to repay all court costs relating to the case.