Google Defeats Deceptive Practices Claim in Australian Litigation

Tribunal Relies on Testimony of Compass Lexecon Affiliate John A. List

On December 9, 2022, the Federal Court of Australia ruled in favor of Google, which had engaged Compass Lexecon, and dismissed allegations by the Australian Competition and Consumer Commission (“ACCC”) that Google engaged in deceptive practices. The ACCC claimed that Google’s notification to users requesting permission to make changes to their account settings to improve ad targeting was likely to mislead or deceive users into agreeing to the change.

The ACCC retained an expert that argued that Google’s notification exploited cognitive biases recognized in behavioral economics to improperly “nudge” users to accept the proposed changes to the account settings. Compass Lexecon expert, Professor John A. List of the University of Chicago, was engaged by Google’s Australia counsel to respond to the ACCC’s expert. Professor List testified at trial in this matter in December 2021.

The Court accepted Professor List’s conclusion that the ACCC’s expert failed to fully consider all relevant behavioral economic concepts and failed to provide empirical support for the opinions that were offered. The Court concluded that the ACCC’s expert “did not move beyond the formulation of her hypotheses (or conjecture or predictions) […] This was Professor List’s main criticism, which I accept. When one has resort to behavioural economics principles alone, multiple competing, including conflicting, hypotheses are available […] Professor List’s short, but cogent, point was that these hypotheses cannot be accepted or rejected without subsequent testing by empirical analysis, a task that was not undertaken in the present case.”

Professor List was supported by a Compass Lexecon team that included Hal Sider, Joseph Goodman, Evan McKay, and Donovan Kaddis. Compass Lexecon was engaged by Sydney-based counsel for Google including Mark McCowan, Simon Johnson, and Ian Reynolds of Corrs Chambers Westgarth and Ruth Higgins SC and Robert Yezerski of Banco Chambers.