Pick Your Keywords Carefully

Advertisers should be aware that case law now exists regarding the use of a competitor's business name as a keyword inserted in the headline of a Sponsored Link. This keyword insertion exposes advertisers to liability for misleading and deceptive conduct.

Conversely, businesses should be aware of statutory consumer provisions and Google policies that could be of assistance if their name is used by a competitor.

In the recent case of ACCC v Trading Post Australia Pty Ltd [2011] FCA 1086 (22 September 2011),ACCC alleged that Trading Post, Google and other advertisers had engaged in misleading and deceptive conduct in breach of s 52 of the Trade Practices Act 1974 (now s 18 of the Australian Consumer Law) ("the Act"). The allegations were in relation to Sponsored Links, which are paid for by advertisers, and appear at the top or the right of the search results in a different colour.

The advertiser may also pay for 'Keyword Insertion', where the keywords that the user searches for appear in the heading of the Sponsored Link, even if they are unrelated. The substance of ACCC's claims was that firstly, by publishing Sponsored Links which were not clearly differentiated from 'organic' (non-sponsored) links, Google misled users to click on the Sponsored links ahead of the relevant search results and deceived them into thinking that these links were not advertisements.

In addition, the ACCC alleged that certain Sponsored Links paid for by the Trading Post containing a headline consisting of a trading name or a website address of a competitor (created as a result of keyword insertion) which linked to the Trading Post website were misleading and deceptive in breach of the Act, although the actual URL of the Trading Post was displayed below the headline in smaller font. This breach of the Act was alleged against both Google and Trading Post. The court found that Google had not contravened the legislation, on the basis that reasonable consumers (being regular users of the Google search engine, not first time users) would understand that the Sponsored Links were advertisements and not the most relevant 'organic' search result.

Reasonable consumers would also believe that Sponsored Link content was determined by the advertiser. Google was not responsible for the representations made by Trading Post, and had in fact discouraged deceptive practices through its trade marks policy. However, Trading Post was found to be in breach of the Act, as its practice created a false association between itself and the trading name that appeared in the headlines of the Sponsored Links (where there in fact was no association).

According to mdp's Rachel Guthrie the case also presents some good protections for those in small business. "SME's who have a registered trade mark can effectively prohibit competitors from using their trade marks in a Google Sponsored Link by using Google's trade mark policy. 

"This is a more targeted and less expensive than litigation against competitors who may seek to benefit from the SME's reputation.

"Registering a trade mark is a relatively inexpensive process and has many other benefits apart from e-commerce," she said.

Rachel Guthrie is a commercial lawyer with mdp McDonald Partners. mdp McDonald Partners are a boutique commercial practice based in Melbourne, Australia. www.mdplaw.com.au.

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