• by Wendy Davis  @wendyndavis, June 5, 2008

Ads that trick consumers into signing up for subscriptions by promising "free" ringtones have sparked a wave of enforcement actions in the last year and resulted in large fines for companies like AzoogleAds and AT&T. Now such ads have landed search giant Google in federal court in California, where it's facing a lawsuit for allegedly showing users pay-per-click ads that tricked searchers into signing up for paid subscription services.

The lawsuit, filed by New Jersey resident Jenna Goddard, alleges that Google accepts deceptive ads for ringtones in violation of its stated policy of only allowing ads for mobile content if the landing page "clearly and accurately displays price, subscription, and cancellation information."

Goddard contends that Google "intentionally misleads its users" by failing to enforce that policy. "Google has systematically declined to live up to its contractual obligations ... opting instead to line its own pockets through an 'anything goes' approach to the advertising and sale of mobile content," the lawsuit charges.

A Google spokesperson said the company intends to "defend vigorously against these claims." The lawsuit, quietly filed in California state court several weeks ago, was moved to federal court last week.

The law firm that brought the case, Kamber Edelson, earlier this week announced it had obtained a settlement agreement with AT&T for a class action involving unauthorized cell phone charges for mobile content including ringtones, games and graphics.

Despite the firm's track record in the ringtone space, Eric Goldman, director of the High Tech Law Institute at Santa Clara University, said he did not think this case would result in a defeat for Google. He said the federal Communications Decency Act immunizes Google from liability in this situation. That law generally provides that Web sites are not liable for actions of third parties on the site. "Google's not a guarantor of perfect content on the Internet," Goldman said.

He added that Google's contracts with advertisers, setting out requirements to participate in the paid search program, are irrelevant. "Google didn't promise consumers there wouldn't be breaches of the policy," he said. "They didn't represent to the consumers, 'You can feel safe coming here and clicking on our ads.' "

In Florida, where AzoogleAds paid a $1 million fine and AT&T paid $2.5 million, the attorney general's office has said it intends to probe Web sites that ran free ringtone ads. Goldman said those Web sites also are probably immune from liability under federal law.