Google could be sued for trademark infringement for using trademarks as keywords in its Ads Programme.
The Delhi High Court Thursday ruled that Google’s use of trademarks as keywords under its Ads Programme may lead to infringement, making it ineligible for safe harbour status.
This means Google will be legally bound if advertisers use another company’s trademark to improve their search ranking and that affects the trademark owner or confuses consumers. Besides, the ruling could affect Google’s advertising revenue, experts said.
Being an intermediary, the tech giant enjoys legal immunity under Section 79 of the IT Act from actions of third-party companies on its platforms. However, the court said Google is the provider of the keywords and an active participant in the use of trademarks. Besides, it also selects the recipients of the information that were infringing links, and hence the safe harbour status will not be applicable, the court said.
The court was pronouncing its judgment in the Google LLC vs DRS Logistics case, in which the latter said its trademark, ‘Agarwal Packers and Movers’, has been used by Google in its keywords. It is now being used by competitors to generate traffic on their websites, the logistics company argued.
Simply put, Google runs an advertisement service (Ads Programme), under which sponsored links of advertisers are displayed along with the results of search queries. Under this, Google suggests keywords to its advertisers which can help them be featured higher on the search results page.
In 2020, Google earned about $147 billion from its ads business, which accounted for over 80% of the company's total revenue.
DRS argued that Google lets its advertisers pay a higher amount and display their advertisements by using the logistics company trademark in the keywords.
While Google argued its position as an intermediary entitled it to “safe harbor,” the bench said they found no issue in the prior single judge’s order, which suggested that the “benefit of safe harbor under Section 79(1) of the IT Act would not be available to it” if they were found guilty of trademark infringement.
This decision casts a shadow on the tech giant’s advertising operations in one of its largest markets.
According to Mikhail Shikhmuradov, an expert of the BRICS Competition Centre, regulators consider unacceptable the behavior of Google, which abuses its dominant position in the search and advertising markets by unfairly diverting traffic and revenues of trademark right holders in favor of competing advertisers.
This could harm the interests of consumers, contracting companies and other market participants relying on internet search and advertising services, as Google holds about 90% of the global internet search market and about 37% of the Indian digital advertising market, the expert emphasizes.
"Google has faced antitrust investigations and lawsuits in a number of countries, including the US, EU, Australia, India, South Korea and Russia. Some of these cases have resulted in fines or settlements with the company. For example, the $5 billion fine imposed by the EU in 2018 for abuse of dominance in Android, or the $162 million fine imposed by India in 2020 for anti-competitive practices related to Android,"
says Mikhail Shikhmuradov.
Sources: Indian Express, TechCrunch
