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Misleading Ads: ACCC Wins Appeal Against Google

samzenpus posted more than 2 years ago | from the on-second-thought dept.

Advertising 61

theweatherelectric writes "As previously noted on Slashdot, the Australian Competition and Consumer Commission has been involved in a long-running legal battle with Google. Vijith Vazhayil of Delimiter writes, 'The Full Federal Court of Australia has ruled that Google breached the law by displaying misleading or deceptive advertisements on its search results pages. The decision follows an appeal by the Australian Competition and Consumer Commission (ACCC), following an earlier decision in favour of Google. The ACCC had first filed the case in July 2007 in the Federal Court alleging that Google had engaged in misleading or deceptive conduct by publishing eleven advertisements on Google's search results page. The headline of each of the advertisements in question comprised a business name, product name or web address of a competitor's business not sponsored, affiliated or associated with the particular advertiser.'"

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How is it illegal (3, Insightful)

Anonymous Coward | more than 2 years ago | (#39594587)

When was Google, or search engines in general, ever legally bound to display anything except what ever they wanted to? I'm not saying Google did in fact do what the ACCC claims.. but so what?

Re:How is it illegal (1)

Anonymous Coward | more than 2 years ago | (#39594657)

Well, they can certainly display whatever they like, so long as they charge a certain amount more or less and explain the reasons behind it, such as irrelevant ads being displayed as competition. However, I don't believe this warrants a lawsuit, but rather improved moderation. Google likes to pride itself on its advertisement system and being able to provide things for free (or cheap) with ads or full without it but with some sort of fee attached to it. Somehow they can make it work most of the time and it's genius, even if we don't always agree with what they're doing. But... I think this lawsuit was just like any other modern-day lawsuit; a lawyer saying "hey, let's make some money!"

Re: How is it illegal (1)

EEPROMS (889169) | more than 2 years ago | (#39602137)

I think this lawsuit was just like any other modern-day lawsuit; a lawyer saying "hey, let's make some money!"

Nice try at attacking lawyers but the ACCC is a fully funded government dept who's job is to enforce consumer rights and corporate industry regulations ie they don't care about the money.

http://en.wikipedia.org/wiki/Australian_Competition_and_Consumer_Commission

Re:How is it illegal (4, Interesting)

Anonymous Coward | more than 2 years ago | (#39594749)

When was Google, or search engines in general, ever legally bound to display anything except what ever they wanted to? I'm not saying Google did in fact do what the ACCC claims.. but so what?

Anonymous coward, you decribe google as a search engine. Google is an advertising business. Google earns 98% of it's revenue from advertising. Search is jut their product. It's like saying McDonald's is a hamburger when McDonalds is actually property and fast food franchise business. Because google is an advertising business it is regulated by the laws of the countries it operates in. It's no different to any other business in that regard. And it has properly been found guilty in this instance. We should be protected from advertising businesses trying to mislead us.

Re:How is it illegal (2, Insightful)

nospam007 (722110) | more than 2 years ago | (#39595661)

". Search is jut their product. "

_YOU_ are their product. They sell your eyes to their clients. The search engine is the bait to get you hooked.

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39595725)

Same for television:
_YOU_ are broadcasting companies product. They sell your eyes to their clients. The shows is the bait to get you hooked.

And for game consoles you are the product - consoles are mostly sold as loss-leader and developers pay to get their games to you.

So, do you go around making same arguments for everything around you, or do you reserve this idiocy for Google only?

This is a tired argument and a silly attempt to paint multifacet company as "just an ad bureau"

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39595835)

Google is an advertising company and your analogies are wrong.

Broadcasters have a mixed model where they're paid both directly by you and by advertisers. You're both consumer and product to some extent.

In consoles, the money is coming from games, which you buy, so you are the consumer and not the product. It's not the same at all.

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39595951)

Google has a mixed model where they're paid both directly by you and by advertiser. You're both consumer and product to some extent.

In consoles, the money come to console producer from devs who pay for developer licenses, who then recoup that with money from games, which you buy. Sony Computer Entertainment is not a game console producer, it's an intermediary service between game devs and gamers.

See how stupid classifying by profit centers, not services provided is?

Re:How is it illegal (1)

Dishevel (1105119) | more than 2 years ago | (#39597455)

I do not pay ABC, NBC, CBS, or any of the local broadcaster anything.
They are funded 100% by Ads.

Re:How is it illegal (1)

jedidiah (1196) | more than 2 years ago | (#39597387)

Regardless. If I am searching on a something, it is likely that I will be interested in supporters, detractors, and alternatives. Others might feel the same way and bias the raw search results accordingly.

That's not even getting into what Google might want to do for it's own benefit.

Re:How is it illegal (1)

Anonymous Coward | more than 2 years ago | (#39595803)

The relevant law is something like this - A corporation, in trade or commerce, shall not engage in conduct that is mlsleading or deceptive or likely to mislead and deceive. The test is objective - was the conduct misleading or deceptive - not was the party intending to mislead and deceive.

An advt or search response comes up headed IBM - you click on it and end up at (say) Oracle.

While there is a lot of case law on it, not really much to discuss, is there? Just who to prosecute (it is not a damages case) - the corporation that carried the advt or the one that placed it.

Very powerful consumer protection provision.

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39610369)

That is exactly the right question, except that the court got the answer to the question wrong. The company who should be prosecuted should be the one who placed the ad. The one who carried it is in no position to tell whether the former company's product is fraudulent or misrepresented. You don't sue the New York Times when someone who posted a classified ad there turns out to have ripped you off. You go after the person who actually perpetrated the misconduct.

Re:How is it illegal (2)

s0nicfreak (615390) | more than 2 years ago | (#39596181)

Why exactly should we be protected? Why should it not be left up to us to actually think? All of advertising is misleading in some way.

Re:How is it illegal (1)

scot4875 (542869) | more than 2 years ago | (#39601851)

Why exactly should we tolerate behavior that has been deemed abusive?

--Jeremy

Re:How is it illegal (1)

s0nicfreak (615390) | more than 2 years ago | (#39603735)

I don't know, why? There are a lot of behaviors I deem abusive, yet they are still tolerated and often encouraged. I personally do not find comprising of a business name, product name or web address of a competitor's business not sponsored, affiliated or associated with the particular advertiser to be abusive. Why do you?

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39607891)

Because it's fraud. People decided a long time ago that fraud was bad. Legal fraud would mean that you can say anything to someone and then do anything horrible and unexpected to them that they did not agree to for profit, and there would be no recourse. You could rob them, you could sell them a "car" for $20,000 and make it a toy car. You could tell them they're having a benign procedure and then remove all their organs and be like, "Why should you be protected over my greedy profiteering?" Actually that stuff happens in hospitals, but it's wrong, and contrary to popular belief, it's very difficult to sue doctors.

Re:How is it illegal (1)

s0nicfreak (615390) | more than 2 years ago | (#39645133)

Saying "it is wrong" is not a valid reason when many people do not think it is wrong. Who would be stupid enough to give $20,000 to someone without seeing the car they will be buying first? Who would use a doctor without other former patients saying he is legit? If people are this stupid, they probably shouldn't be left to make decisions with such large amounts of money anyway. How about we educate people, and stop them from being so stupid, rather than making laws to protect them and allow them to keep their stupidity?

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39596473)

You committed the elementary error of saying that the only important part of a human is the stomach, because that's where the body's nutrition comes from, The money comes from advertising, but the reason people are willing to look at the ads are search, Gmail, maps, et cetera. If Google shut down search, maps, and Gmail, it would rapidly become an ex-parrot (er, ex-company).

Re:How is it illegal (4, Insightful)

commlinx (1068272) | more than 2 years ago | (#39594769)

I believe it's covered under deceptive advertising laws. Normally the ACCC does good work and while I agree with the vibe of what they're trying to achieve - disallowing a banner to display or reference one product but link to a site selling a competitive product, I think in this case they got the wrong target. I'd much rather them go after the entity that placed the ad.

That's been the traditional approach taken with radio, television and print advertisements.

Re:How is it illegal (2, Interesting)

Mickey06 (2611575) | more than 2 years ago | (#39594825)

I think in this case they got the wrong target. I'd much rather them go after the entity that placed the ad.

That's been the traditional approach taken with radio, television and print advertisements.

No, they got exactly the correct target. Back when this case against Google started they fully allowed the practice. It is very telling that after several countries started investigations and prosecuted, Google disallowed the practice in those countries. Not globally, just where they got shit for it.

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39596431)

Reference please: that sounds dubious. Google advertising is all done by algorithms, and most of the enforcement of policies is done algorithmically. While it's easy to believe that -- early on -- there was no algorithmic check to ensure that the link matched the text, once someone decided it was necessary, it would be rolled out worldwide. Nobody would want to complicate the code base with country-specific exceptions unless there was a really good reason. And this kind of advertisement is a small fraction of the total, so even if Google were entirely greedy, it would not be worth annoying users and complicating the code base to keep this kind of low-quality advert around.

Re:How is it illegal (1)

KarrdeSW (996917) | more than 2 years ago | (#39597689)

Nobody would want to complicate the code base with country-specific exceptions unless there was a really good reason.

Of course nobody would want to, but since every country has a different set of laws and regulatory bodies with different rules, it's pretty much the default for a multinational corporation to have different code running in every country. Even in the US, it's not unusual to have different code running in every state. It somewhat depends on how regulated your industry is. Advertising definitely has a lot of rules in certain locales.

Re:How is it illegal (1)

Anonymous Coward | more than 2 years ago | (#39594845)

while I agree with the vibe of what they're trying to achieve

The vibe of the Constitution of the Commonwealth of Australia is often enough to base an entire case on.

Re:How is it illegal (1)

Gwala (309968) | more than 2 years ago | (#39594867)

That's because the whole thing is rather short and vague - and in general pretty poorly written; and a lot has had to be interpreted around it. (e.g. freedom of speech is inferred from the "vibe" of the document rather than the document itself.)

Re:How is it illegal (0)

Anonymous Coward | more than 2 years ago | (#39594967)

Wooosh.

Go watch The Castle sometime.

Re:How is it illegal (1)

donscarletti (569232) | more than 2 years ago | (#39595701)

Well, you missed the "The Castle" reference.

But constitutional law in Australia does not deal with basic human rights, just delegation of power between governments and the mechanism of parlimentary democracy. The constitution has been found to give the Federal Government the power to unilaterally ratify treaties, which it has with various UN charters regarding human rights.

Basically the Australian constitution specifies business as usual for the colonial legislative assemblies, which become state legislative assemblies, the only difference is that the powers previously withheld from colonial home rule are now held by Australian House of Representatives in Melbourne (later Canberra) rather than the Colonial Office in London. The same applies to the Supreme Courts which may be overruled by the High Court rather than the Privy Council.

There is nothing there whatsoever about founding principles, it gave Australians a chance to find their own destiny, rather than mandate conditions from the get-go.

Re:How is it illegal (2)

Chuck Chunder (21021) | more than 2 years ago | (#39595403)

I think in this case they got the wrong target. I'd much rather them go after the entity that placed the ad.

If you read the link you'll see they went after both which is, I think, entirely reasonable.

Re:How is it illegal (1)

ozmanjusri (601766) | more than 2 years ago | (#39594805)

I'm not saying Google did in fact do what the ACCC claims.. but so what?

Australia has advertising standards laws, in particular, that advertisements not be misleading.

Google's adverts misled consumers into clicking competitor's advertisements when they searched for a product.

“Google’s conduct involved the use by an advertiser of a competitor’s name as a keyword triggering an advertisement for the advertiser with a matching headline. As the Full Court said this was likely to mislead or deceive a consumer searching for information on the competitor,” ACCC chairman Rod Sims said in a statement. “The ACCC brought this appeal because it raises very important issues as to the role of search engine providers as publishers of paid content in the online age.”

Re:How is it illegal (5, Informative)

bloodhawk (813939) | more than 2 years ago | (#39595147)

Google is an advertising company, therefore google must obey the advertising laws of the associated countries. In Australia the ACCC is the agency that chases down breaches of the advertising law. You will find an equivalent in just about every country.

Re:How is it illegal (1)

javelinco (652113) | more than 2 years ago | (#39597113)

Are the TV networks, magazines and newspapers required to vet their ads to this degree as well? It seems that the medium for which an ad is being transmitted is being required to authenticate those ads as being valid under the laws of that country. While I think that's rather ridiculous, as long as it is not being applied randomly, but instead in a systematic, widespread fashion, the law will at least not unfairly advantage certain types of advertisement mediums. And that's important, IMHO.

Re:How is it illegal (1)

bloodhawk (813939) | more than 2 years ago | (#39604617)

Why is it ridiculous, google operate an Australian website with Australian advertising, why shouldn't they be required to obey Australian laws in those circumstances? All advertising is subject to the advertising laws regardless of medium. The ACCC tends to be one of the better agencies that applies the law equally to all, they regularly are cracking down on both local and international companies that breach the false/misleading advertising laws. They even tend to initially warn companies of potential breaches and only take action when warnings are ignored (eg. Google and Apple were both warned prior to action being taken).

Re:How is it illegal (-1, Flamebait)

FreakyGreenLeaky (1536953) | more than 2 years ago | (#39595293)

Whatever country google operates in, they need to observe the laws of that country.

Simple.

In other words, you're not only an anonymous coward, but also an ignorant fool.

Search engine is irrelevant (2)

Chuck Chunder (21021) | more than 2 years ago | (#39595387)

This isn't about search results. It's about adverts saying "Brand XYZ" that take people to "Brand ABC".

Re:Search engine is irrelevant (1)

TheLink (130905) | more than 2 years ago | (#39595455)

If that's the case then I agree with the judgement. I don't want to be taken to ABC if I was expecting XYZ. Especially if it was an ad.

I'm fine with Burger King having a Google ad that says "Burger King" when I search for McDonalds. But I am NOT fine if the ad says "McDonalds" and takes me to Burger King. That's just stupid and wrong. I do click on Google ads sometimes when they are relevant. If they start regularly putting deceptive ads, I'd make it a point to avoid them completely, or even block them.

The fact that Google needs a court case to tell this to them is another sign that Google is going down the drain. They hired too many MBAs?

Re:Search engine is irrelevant (0)

Anonymous Coward | more than 2 years ago | (#39598957)

Nice reply.
At first, I thought: Lame attempt with the link to tinyurl.com labeled "Too many replies beneath your current threshold".
So, I modded you troll.
Too late, I realize that perhaps that supposed to be a on-topic joke...
Someone please mod parent funny (and mod me as not paying enough attention)

Re:How is it illegal (2)

Shavano (2541114) | more than 2 years ago | (#39596305)

There are laws against false advertisements. The novelty here is charging the medium rather than the ad's creator.

It would be like charging a radio station for airing an ad by a Ford dealer who claimed to have yhd best prices on new Chevy's.

Re:How is it illegal (1)

Eskarel (565631) | more than 2 years ago | (#39597433)

A search engine can display anything they like, they are largely unregulated. An advertising business on the other hand cannot, and that is what Google actually is.

Fr1St Pr0sT (-1)

Anonymous Coward | more than 2 years ago | (#39594589)

Fr1st Pr0st !

w00t!

Re:Fr1St Pr0sT (-1)

Anonymous Coward | more than 2 years ago | (#39594611)

That stopped being funny about 12 years ago.

WHAT ONE HEARS WHEN A CHICK DRINKS WAY TOO MUCH !! (-1)

Anonymous Coward | more than 2 years ago | (#39594655)

Vijith Vazhayil Euhghhag !!

This is silly.... but unfortunately that is.... (2, Interesting)

Anonymous Coward | more than 2 years ago | (#39594705)

The cost of doing business internationally. Having to deal with each country's "silly" laws. Whatever they are in your field. This is why multi-nationals have TEAMS of teams of lawyers for this crap. Google just got too big too fast and didn't cross all its I(s) and J(s) and dot all of its T(s).... or maybe that was what they did do... BUT, either way... Every country has laws that don't make sense in other nations. IE: Germany- unable to deny holocaust, Thailand- you can't even hint at the King doing anything wrong, etc, etc. In countries like the US only saying things like Invoking violence or mayhem (calling Fire in a theater) [saying you will kill the POTUS or VPOTUS are two notable exceptions... we have a bad track record on that....].... but if you act like a tool and say you don't believe the holocaust we handle it by public ostracism instead of a law. However, it is well within other countries' rights to pass laws we all feel are silly.

So therefore... If AU requires ads to not be bought by competitors, then Google has the choice of not doing business there or following their rules. Q.E.D. Our opinions on the validity of the rules be damned.

Re:This is silly.... but unfortunately that is.... (1)

Anonymous Coward | more than 2 years ago | (#39594781)

The ACCC is an independent statutory authority, which means it makes decisions independently from the current government.
Just saying...

Re:This is silly.... but unfortunately that is.... (3, Informative)

dackroyd (468778) | more than 2 years ago | (#39595105)

If AU requires ads to not be bought by competitors, .

Competitors are still allowed to bid on other companies trademarked names - it's just that the link can't be deceptive.

e.g. Toyota could bid on keywords like 'ford truck' to have one of Toyota's ads come up.

What they can't do is have the ad say 'Hot deals on Ford F-150 trucks' and then have it link through to a site that only sells Toyota trucks, as that is a deceptive advert.

Re:This is silly.... but unfortunately that is.... (1)

s0nicfreak (615390) | more than 2 years ago | (#39596191)

I don't get while that's illegal. When the consumer gets to the site and sees only Toyota trucks for sale, they are likely to leave as they want to buy a Ford truck. Then Toyota has paid google for an ad click, but not gotten a purchase out of it.

Re:This is silly.... but unfortunately that is.... (1)

Urban Garlic (447282) | more than 2 years ago | (#39596573)

So, at what point does it become a problem for you?

Suppose the site your reach described Toyota trucks in loving detail, but called them Fords throughout? Suppose the vendor in question puts "Ford" logos on the trucks coming out of the Toyota factories. Suppose the consumer actually buys one of these, thinking it's a Ford. Is all of this OK? After all, the consumer evaluated the specifications, presumably found them satisfactory, and made the purchase of his own free will. Does that make the deception immaterial?

Re:This is silly.... but unfortunately that is.... (1)

s0nicfreak (615390) | more than 2 years ago | (#39597289)

The descriptions of someone trying to sell it to you shouldn't be the only thing on which you base your purchase decisions, especially with something as expensive as a truck, and especially not from a site you're not sure is legit. A quick google would show that the trucks being sold on the site are not Fords, and that they are worse than, better than, or equal to real Fords. And if I'm that determined to get a specific brand of vehicle, I'd likely know what sets it apart from other brands (it isn't just the logo), and I'd quickly see the differences. If I know nothing and am just getting a specific brand to feel better about myself, I still think I got that brand, so it doesn't really matter. Why do we have to make laws to protect people from their own stupidity?

Re:This is silly.... but unfortunately that is.... (1)

Urban Garlic (447282) | more than 2 years ago | (#39599715)

You're assuming that the fault lies entirely with the "stupid" consumer if they don't get what they want, even in the face of deliberate attempts to deceive them.

I think this neglects a rather obvious imbalance of power between a fraudulent seller, who (presumably) stands to gain a lot from the (again, presumably) numerous known fraudulent transactions he will make, versus the consumer, for whom this is only one transaction out of many of different types, and who faces the task of proving a negative in order to ensure that he is not being swindled (and gets called "stupid" on web forums if he fails).

In this particular case, it seems very clear to me that requiring vendors to be held accountable to a third party for the basic honesty of their claims is both reasonable and economically efficient -- if customers have confidence that they can believe reasonable claims in advertisements, the time costs of product selection and consumption are greatly reduced, and customers and vendors both benefit from the correspondingly greater rate of transactions. In principle, there is no particular reason why the third party in question has to be the government, it could be a private reporting bureau of some kind. There are advantages to having a government role, they have better access to commercial data, and a pre-existing enforcement mechanism, and it's not obviously a crime against liberty for them to play this role. When benefits of actions are societal, as is often the case for confidence-increasing measures, it seems reasonable for society to act through governmental mechanisms to secure these benefits.

Or so it seems to me, anyways. We don't have to make laws to protect people from their own stupidity, but at least in the case of truth-in-advertising, it's economically beneficial and compassionate to do so.

Re:This is silly.... but unfortunately that is.... (1)

s0nicfreak (615390) | more than 2 years ago | (#39603725)

If people have confidence that they can believe reasonable claims in advertisements, they start to believe the unreasonable ones too. "Buy this and you can be pretty and well-liked like the celebrity in the ad!" Etc.

Re:This is silly.... but unfortunately that is.... (0)

Anonymous Coward | more than 2 years ago | (#39599921)

Because that's fraud. You're not allowed to out-and-out lie in advertising.

Re:This is silly.... but unfortunately that is.... (1)

s0nicfreak (615390) | more than 2 years ago | (#39603695)

You told me the name of the illegal action, not why it is/should be illegal.

Re:This is silly.... but unfortunately that is.... (0)

Anonymous Coward | more than 2 years ago | (#39600115)

Seems to me that this is an instance of Trademark law and the correct response is to let Ford sue Toyoda into the ground for abuse of Trademark.

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Re: (1)

Bitgod (2611695) | more than 2 years ago | (#39594789)

Yeah I noticed the same stuff when I look for certain things in search. False or fake products come up as their ads.

That may be true (1)

jesseck (942036) | more than 2 years ago | (#39594949)

Yeah I noticed the same stuff when I look for certain things in search. False or fake products come up as their ads.

Wouldn't that be more a problem of the advertiser? Advertisers provide key words, which Google posts the advertisements on. Is it Google's fault that Widget Inc decided to add the key word "blanket" when they make electronic do-dads? I didn't RTFA, and I've been drinking beer for a few hours, but if Widget Inc says their ideal customer wants to purchase electronic do-dads, the why would Google doubt that?

Re:That may be true (1)

jesseck (942036) | more than 2 years ago | (#39594965)

Is it Google's fault that Widget Inc decided to add the key word "blanket" when they make electronic do-dads?... but if Widget Inc says their ideal customer wants to purchase electronic do-dads, the why would Google doubt that?

Wow, is this an indication of a problem? I can't even post a coherent paragraph, much less proofread.

Re:That may be true (1)

Kalriath (849904) | more than 2 years ago | (#39595987)

Because as an advertising agency it's their job? Simple, really.

(plus 0ne Infor8ative) (-1)

Anonymous Coward | more than 2 years ago | (#39594883)

log on Dthen the

The Full Federal Court (1)

mapkinase (958129) | more than 2 years ago | (#39595573)

This "The Full Federal Court", what is it full of?

Re:The Full Federal Court (0)

Anonymous Coward | more than 2 years ago | (#39600209)

This "The Full Federal Court", what is it full of?

They don't like fraud - in this where google fraudulently pretends that paid advertising is organic search results.

Google was rightly prosecuted for this. Like the court I don't like fraud (deception for profit) either.

About time (0)

Anonymous Coward | more than 2 years ago | (#39597657)

I'm getting a bit tired with the arrogant attitude that Google displays every time they ignore local regulations. Google, you need to understand this: The world is not Mountain View and you have to abide to the local laws. Don't like it? Sod off. You and your privacy invading products will not be missed!

--
Disclaimer: I work for TAGA (The Arrogant Google Assholes)

Seriously, how is it that Google is responsible? (0)

Anonymous Coward | more than 2 years ago | (#39604421)

If a used car dealer hires someone to create a miss-leading commercial that is then aired on TV, who does the ACCC go after? The used car dealer, the producer that filmed the commercial, or the TV station that broadcast the commercial? Or do they go after them all at once?

It's entirely reasonable to believe that neither the producer that filmed the commercial nor the TV station that aired it had sufficient domain specific knowledge to know that the commercial's content was actually false prior to airing it.

Since Google's advertising system is largely automated, it's that advertising publishing system that would need sufficient domain specific knowledge to distinguish false advertisements. How exactly would that work, anyway? In the future, should we fine the computer algorithm that can't tell that a company purchasing an advertisement on a keyword is purchasing a false advertisement under Australian law? Or should we have humans review every single advertisement before it is posted, and then hold those humans responsible when they can't tell fact from fiction?

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