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Consumer Law Catches Up with Keywords

When buying online advertising, businesses should be careful in selecting search terms, particularly when they involve names and trade marks of competitors.

A Federal Court judge has confirmed that Google’s practice of displaying ‘organic’ search results along with ‘sponsored links’ does not mislead or deceive consumers because it is sufficiently clear that the two types of results are of a different nature, but an advertiser was liable because it had paid for the search terms and prepared the advertisements.

The advertiser bought certain keywords, known as Google AdWords, that can be used to generate sponsored links from the search engine when a user looks for a particular term. The purchased AdWords meant that their sponsored links related to a competitor of the product or service actually searched for, which the Australian consumer authority argued could mislead users. It also said that the search results falsely asserted there was an affiliation between the two.

The judge held that since the advertiser had paid for the AdWords, it had made the misleading presentations. Google merely made available the technical facility for the advertiser and other businesses to purchase those terms, which resulted in their appearing as sponsored links when a search was performed.

Importantly, the technical facility did not necessarily result in Google endorsing or approving the content of the associated advertisements, it only communciated them. The outcome may be different if Google ‘maximisers’ suggested the search terms to advertisers, meaning that it was more inolved in the selection of AdWords.

The case is going to an appeal court this year but advertisers would be well warned to take care when purchasing keywords or Google AdWords so they do not infringe any third-party rights or falsely represent that they are affiliated with other brand owners when they are not.

In particular, using the domain names of competitors in search results appears more likely to be misleading or deceptive because users clicking on a hyperlink that contains a competitor’s website are more likely to think they are being directed to that URL.

As a brand owner, you need to be diligent in protecting your brand and cannot rely on third-party search engines to do so. Given the importance of online searching now, this is another reason to consider registering business names, brand names and product names as trade marks to improve their protection online.

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