An antitrust case opened in Australia's Federal Court yesterday against Google, with the company's Irish operations named as one of the defendants.

The proceedings by the Australian Competition and Consumer Protection Commission (ACCC) allege that the search giant has deceived consumers by not differentiating between its organic search results and those which are being displayed because Google has received payment from an advertiser.

The ACCC is taking the case against Google Ireland, Google Australia and their parent Google Inc. A company called Trading Post Australia is also named in the action.

The case arises out of an incident in 2005 when Trading Post allegedly bid on the business names "Kloster Ford" and "Charlestown Toyota" in an attempt to drive traffic to its own site using Google's Ad Words program.

Kloster Ford and Charlestown Toyota are car dealerships in the New South Wales city of Newcastle which compete against Trading Post.

The ACCC claims it is the first case of its kind anywhere in the world. The case is likely to be closely watched by internet companies as sponsored advertisements are a major source of revenue for search engines and other online businesses.

Google Australia has said the claims are without any merit and is defending itself vigorously.

After hearing legal submissions, judge Jim Allsop adjourned the case until October 4th.

Google's Irish operations employ over 1,000 staff. In the past Google Ireland Holdings had been central to reducing the company's tax bill but under a deal struck with US tax authorities last December, Google agreed to limit the tax savings it would make by using its Irish subsidiaries.