Google eyed by European Parliament Report on misleading and aggressive advertising

The European Parliament has approved a report recommending that the European Commission introduces new legislation to combat misleading and aggressive advertising. Although the Unfair Commercial Practices Directive already regulates this area, the Juvin Report highlights the danger of the growth of new, more pervasive forms of advertising being used on the internet.

Though there is no explicit mention of Google Inc, it is obvious that the proposals target some of the services offered by the internet giant. With a clear reference to Google’s AdWords service, the Report calls on the Commission to condemn the practice of allowing companies to bid for keywords associated with brand names in search engines. When an internet user enters a purchased keyword into a search engine, that company’s advertisement is displayed alongside the ‘natural’ search results. Since 2000, when AdWords was first released, Google has faced countless lawsuits in the US and across the EU over its service. Despite claims that selling brand names as keywords encourages acts of parasitism and counterfeiting, the European Court of Justice has upheld the practice as lawful so long as the associated ads do not mislead the user as to the identity of the advertiser. The Report proposes that keywords associated with registered trademarks should only be available if the owner of the trademark authorises such use of the brand in question.

Targeted advertising is also flagged up as an unfair advertising practice. With significant implications for Google’s Gmail service, the Report recommends the complete prohibition of third parties reading private emails for advertising purposes. It is suggested that such practices are intrusive and constitute an attack on the privacy of individual consumers. Besides Google, websites such as Trip Advisor could also come under fire if the proposals are taken up. The Report warns of the danger of ‘hidden advertising’ which takes place in forums where consumers post comments to one another about various goods or services. It recommends the creation of forum moderators, and suggests running a campaign to alert consumers about this form of advertising.

The Report is scheduled for a full vote in December.

Further reading

Read the Juvin Report

Internal Market and Consumer Protection Committee press release

By Katey Dixon

Google’s AdWords faces further scrutiny in the Paris Court of Appeal

Both LVMH Moet Hennessy Louis Vuitton and the internet search giant Google claimed victory last week in the latest of a series of challenges to Google’s AdWords business. On Tuesday 13 July the French Supreme Court (Cour de Cassation) referred a ruling in favour of the French luxury goods company back to the Court of Appeal.

The dispute involves Google’s paid referencing service, ‘AdWords’, which allows advertisers to bid for keywords- many of which are protected trademarks- used in Google’s search engine. When an internet user enters a keyword, advertisements known as “sponsored links” are shown in the top of the screen. Consequently, a search on a trademarked word could bring up a competitor’s product or - in theory – even direct the consumer to counterfeit products.

The Cour de Cassation’s judgment affirmed an earlier ruling by the European Court of Justice, which held that the practice of selling keywords associated with registered trademarks does not infringe trademark rights per se. Despite using its official blog to herald that ruling as a triumph for the free flow of information over the shackles of an overly coercive IP regime, the court made it clear that such advertising could constitute an infringement where it “does not enable an average internet user... to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark... or on the contrary, originate from a third party.” LVMH said that the Supreme Court’s recent decision “will enable the Paris Court of Appeals to rule on Google’s civil liability when using trademarks without the trademark owner's authorization." No date has been set for the forthcoming hearing.


Sources

http://googleblog.blogspot.com/2010/03/european-court-of-justice-rules-in.html

http://www.mediaweek.co.uk/news/1015878/Google-AdWords-held-liable-sale-trademarks/

http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2010/07/12/daily10.html