The case, the first of its kind in this country that seeks to make search engines responsible for the content of the internet - could trigger severe restrictions on the free flow of information on the web.
Last night, internet experts warned that if the action was successful it would mean Google could be held liable for the content of 11.5 billion web pages.
The case is being brought by a 48-year-old man from Wembley who has instructed a City law firm to begin defamation proceedings after the search engine directed users to web pages that the businessman claims contained "deeply offensive and commercially damaging" material about his enterprises.
In one anonymous posting on an internet discussion forum, Brian Retkin, managing director of the internet company dotworlds, is wrongly accused of cashing in on the 11 September attacks on America by offering the free registration of domain names to the US in a way that took advantage of the fervent patriotism at the time. In other anonymous postings, he is wrongly and groundlessly accused of conducting fraudulent business.
The allegations are believed to have originated in America, where it is much more difficult to succeed in a libel claim.
US judges have ruled that search engines and other third party internet service and product providers are immune from defamation lawsuits. But in Britain, similar legal protection is conditional on the company not having notice of the complaint. And in Britain that area of the law is yet to be fully tested.
Mr Retkin, whose internet company is a domain name registrar (a company that allows customers to register domain names on the internet), says he has spent three years trying to persuade Google to permanently remove the libellous allegations from its search results.
In a letter sent to Google, Franklin Price, a litigation partner at the law firm Jeffery Green Russell, has given formal notice of the defamation action under the court's pro-action protocol.
"There comes a point," said Mr Retkin, "when someone must take responsibility for this material. These allegations were posted anonymously so there is no way of suing the author. Where it has appeared on internet discussion forums we have asked them to remove it but it keeps popping up again at other internet addresses. The only solution is for Google to remove it and give an undertaking they will remove it permanently."
In legal correspondence between Mr Retkin and Google, a California-based company with sales and marketing offices in London, claims it has "blacklisted" the offending links and removed the material complained of by Mr Retkin. It also rejects the idea that it should be responsible for the contents of links produced in an internet search.
In an email written by Google's legal counsel Harjinder Obhi, the company argues: "Google is not responsible for the content of any result of a query which may be presented to a user of Google's web search service. Google has absolutely no connection, control or ability to direct or influence the content of web pages which may be shown as links within any given set of search results."
Defamation on the internet
Internet publishers rightly fear the libel laws in this country, which are much stricter than those of other jurisdictions. They know the onus is on them to prove the truth of any statement found on their websites. Recent UK case law has established that a company based outside the jurisdiction may not be immune from litigation in this country if the material can be read by internet users in this country.
A successful defamation ruling against a search engine such as Google would have dramatic consequences for thousands of similar organisations or internet product providers which refine, channel and forward information. The reason that has not already happened is that the Defamation Act 1996 offers a defence to an internet product or service provider where it can claim it is unaware of defamatory or potentially defamatory material it is hosting or material arising from a search result. This protection is supported by the Electronic Commerce (EC) Directive, 2002. But the Defamation Act stipulates that once the company has been put on notice about a complaint it must take action to remove the material or block access.
Friday, 29 June 2007