The Australia Competition and Consumer Commission (ACCC) has dropped the case it filed against Google's Irish and Australian subsidiaries last month. This was reported by the Reuters. But, now the Australian watchdog will pursue the case against the Google parent company and the Trading Post for misleading users with alleged sponsored advertising links.

The ACCC has told a Federal Court in Sydney, that it would amend its action after Google Inc. and any confirmed judgement against it would directly apply to its subsidiaries.

ACCC spokeswoman Lin Enright, told the press, "Google Inc has told us it is responsible for everything. So we agreed with Google Inc that if there were any injunctions or declarations made against Google Inc they would have to put them into effect in Australia. So there was no need to include these subsidiary companies on the statement of claim. The case is still very much alive.”

According to the watchdog, Google has not yet made a clear line of distinguish between sponsored advertising links and the search links. Due to this, when customers type keywords into Google's web search system, they get misleading results. The ACCC had alleged that in 2005, the Trading Post contravened sections of the Trade Practices Act of 1974 when it inserted competitor names on its Google-sponsored advertisements. With this the online search results started getting directed to the Trading Post site.

As the ACCC is still not convinced that Google is not guilty of misleading the public over sponsored and organic search results, it will present its amended action to the court on October 25. And the hearing will be held on November 16.

Google is denying the accusation and says, will vigorously fight the allegations.

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