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An Australian court on Tuesday found Google Inc. guilty of breaching trade law by hosting misleading or deceptive advertisements in a ruling that holds search engines responsible for their advertisers' content.

Three Federal Court judges unanimously overturned a lower court's ruling from September last year that Google was not responsible for advertisers' breaches of Australia's Trade Practices Act.

The appeal court ruled that Google had engaged in misleading or deceptive conduct with four ads that appeared on its Google Australia website. The advertisers used the names of competitors as keywords to trigger their own ads appearing.

The court ruled this was likely to mislead people searching for information about those competitors. Google's "AdWords" system posts small text-only advertisements next to search results based on search keywords selected by the advertisers.

The section of the law that Google breached does not impose a fine. But the court ordered Google to make changes to prevent future breaches and to pay court costs to the Australian Competition and Consumer Commission, which appealed the September ruling.

Google said it was disappointed by the decision and is considering its options, which include a High Court appeal.

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