A recent ruling by an Indian court against Google’s keyword advertising practices has drawn new attention after the founders said rivals have long used the system to steal customers and force companies to pay to protect their brands.
A ruling by the Delhi High Court on May 22 in a trademark dispute involving bathroom accessories maker Hindware held Google liable for trademark infringement over its keyword advertising practice and awarded the company ₹3 million (about $31,600) in nominal damages.
In its 163 pages judgment (PDF), Justice Mini Pushkarna rejected Google’s argument that it was merely a passive intermediary in serving ads on its search platform. Google, through its AdWords platform, allowed Hindware’s competitors to use “Hindware” as a keyword to target users searching for the brand, Hakim said.
“By selling the plaintiff’s trademark (Hindware) as a keyword without permission for commercial revenue, Google violates the plaintiff’s right to exclusive use of the trademark under Section 28 of the Trademark Act,” the judge said.
The decision drew attention on Friday after Indian entrepreneurs including Zerodha founder Nithin Kamath and Zoho founder Sridhar Vembu went public. supported the verdictcontends that rivals have long used Google’s advertising tools to divert traffic from established brands and force companies to spend money protecting their names.
Kamath said that Zerodha has been facing problems for more than ten years. he wrote on X: “When someone searches for ‘Zerodha’, the traffic should rightfully come to Zerodha. But what often happens is that the first few results on Google Search are ads and lead the customer to a competitor’s website.”
Google, for its part, said that its Ads policy on trademarked keywords “does not allow competing advertisers to use trademarked terms in their ad text” and that the policy applies globally.
“We look forward to continuing to align our operations with local legal frameworks while maintaining strict standards to protect the long-term interests of our users,” a Google spokesperson told TechCrunch.
India is a key market for Google, with more internet users than any other country except China, and court rulings that have a particularly significant impact on its search and advertising businesses.
Legal experts, however, said the ruling’s implications may be narrower than some public reactions suggest.
“The court will require platforms to review their processes to see if their automated tools offer trademark terms to advertisers as a whole,” says Aprajita Rana, partner at AZB & Partners.
However, Rana told TechCrunch that the decision does not “remotely affect” the liability of online platforms in India, as courts have already determined that internet companies can lose legal protection when they play an active role in illegal activity.
“What’s important about this is that providing access to trademark terms, even in ad curation between online platforms and advertisers and unknown to customers, makes it a participatory activity for platforms,” Rana said.
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