I got the question recently from a friend at a big corporation, in the context of buying reviews. Of course, Google does not make the law (yet), but there are laws restricting misleading marketing.
In Canada, the main law in this field would be the Competition Act, whose sections 52 and 74 (or is that 54 and 72?) deal with misleading advertising.
The law was revised in March 2009 to, amongst other things, raise fines for criminal prosecutions under the Act. Which is awesome!
Fines were at $50,000 to $100,000 penalties for individuals, and $100,000 to $200,000 for companies.
Today they’re at $750,000 to $1M for individuals, and $15M to $20M for companies. A considerably greater dissuasive force, imho .
You can find my more eloquent and detailed post on this, in French, at Blogue Marketing Interactif. (I guest-write for the Montreal Marketing Association.)
p.s. What does this tell you about flogs?Law, link buying