A court in Brazil held that Mercado Libre's use of the Verisure brand as a keyword for Google ads directing consumers to its site constituted unfair competition.
The 1st Business Court of São Paulo Court of Justice (TJSP) upheld a trial court ruling against Mercado Libre for engaging in unfair competition practices against security company Verisure. The court determined that the marketplace's illegal conduct involved purchasing the keyword “Verisure” for Google ads directing consumers to its site, thereby diverting potential buyers from Verisure’s own site.
The judges applied the TJSP's precedent. According to the XVII Statement of the Business Law Group, approved in 2022 and amended in 2023, “using the nominative element of a registered trademark belonging to another party, which has sufficient distinctiveness and operates in the same business sector, as a search term for advertising with online search providers constitutes an act of unfair competition.”
The unique aspect of this case is that it does not involve two companies in the same industry but rather a third party, a marketplace, and a specialized security company. Mercado Libre argues that because it does not conduct the same business activity, there is no unfair competition practice. However, the Mercado Libre marketplace features products from Verisure's competitors and Mercado makes a profit if sales are made through its platform.
✔️ Mercado Libre is the largest e-commerce platform in Latin America. The company operates in 18 countries, including Mexico, Brazil, Chile and Colombia. Its ecosystem includes six major integrated e-commerce services: Mercado Libre Marketplace, Mercado Libre Classifieds, Mercado Pago payment solution, Mercado Credito financial solutions, Mercado Envios logistics solutions including delivery, Mercado Ads advertising platform and Mercado Shops digital storefront.
✔️ Verisure is a provider of security systems with professional monitoring and 24/7 response. The company operates in 17 countries in Europe and Latin America.
In a statement to Valor, Mercado Libre asserts that it “fully complies with current legislation” but adds that it “does not comment on ongoing cases.”
Source: Valor International
