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The competition watchdog says it will appeal a court decision that rejected its claim Google was engaging in misleading conduct.
The Australian Competition and Consumer Commission (ACCC) lost its Federal Court case against Google last month in which it claimed the search engine failed to distinguish properly between advertisements and search results.
Justice John Nicholas rejected the ACCC's claim that Google was engaged in conduct likely to mislead or deceive the public.
On Thursday, the ACCC said it would appeal the decision to the Full Federal Court.
ACCC chairman Rod Sims said the role of search engine providers as publishers of paid content needed to be closely examined in the online age.
"It is very important that the law in this area is clarified and fully understood," Mr Sims said.
The ACCC's case related to 11 distinct claims involving various advertisers and sponsored links which Google is alleged to have published on its results pages.
The ACCC claimed the links were misleading because they included a headline consisting of a trading name, a product name or a website address of the advertiser's competitor but which also served as a link to the advertiser's website.
However, Justice Nicholas ruled that Google merely communicated representations made by the advertiser and as such, it had not breached the Trade Practices Act.
The ACCC said its appeal would be in respect of four advertisements.
"Justice Nicholas found that Google would have been unable to show that it had no reason to suspect that publication of these advertisements was a breach of the Act," it said in a statement.
"The ACCC considers that the Full Court may find that Google made the representations in question and find Google directly responsible for the publication.
"The ACCC takes the view that Google's key word insertion system, plus the role of Google staff, were fundamental to the representations being made."
It is estimated that online search advertising in Australia through search engines such as Google is worth around $830 million per year.
Google is the dominant search engine in the Australian market.
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