An adviser to the highest European Union court recommended Thursday that some restrictions be placed on the rights of advertisers to use the names of rivals as keywords to generate sponsored links on Internet search engines.
If the court goes along with the opinion, the decision could make some advertisers more cautious in their purchase of the search ads on Google, one of the fastest-growing areas of marketing in recent years, analysts said.
“With this opinion, Google’s customers may well reconsider how extensively they want to use a competitor’s mark as an AdWord,” said Kirsten Gilbert, a partner at Marks & Clerk Solicitors in London, referring to Google’s search advertising program.
The opinion was prepared by an advocate general to the European Court of Justice in Luxembourg, which is reviewing a lawsuit by Interflora, the flower delivery service, against the British retailer Marks & Spencer, which has a competing florist operation.
A search under the word “Interflora” on Google’s search engine in Britain turns up sponsored advertisements for three different Web sites: Marks & Spencer’s, Asda’s and Interflora’s. Interflora argues that this misleads consumers.
The lawsuit is the latest in a series of cases in Europe in which the parameters of search engine advertising, which generates more than $20 billion a year for Google, are being defined.
In a landmark decision last year, the Court of Justice ruled that Google was not liable for trademark infringement in a case brought by LVMH Moët Hennessy Louis Vuitton and other brand owners. LVMH argued that Google should block other advertisers from buying search keywords under LVMH trademarks like Louis Vuitton, saying these were often used to direct consumers to sites selling fake handbags and committing other trademark violations.
Rather than suing Google, Interflora went after a user of the service, Marks & Spencer. Nevertheless, if the court goes along with the advocate general’s opinion, something it generally does, the decision could have financial ramifications for Google if advertisers have less latitude to buy rivals’ brand names as keywords for so-called sponsored links, analysts said.
They added, however, that the effects could be limited by the specifics of the case, which centered on the possibility that consumers might be confused by Marks & Spencer’s ads, thinking that they were actually directing people to Interflora’s own network of florists.
The advocate general, Niilo Jääskinen, said advertisers should be blocked from buying rival trademarks as keywords if an ad “does not enable an average Internet user, or enables the said user only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trademark or an undertaking economically connected to it or from a third party.”
Marks & Spencer declined to comment on the opinion. Interflora did not immediately respond to a request for comment.
Google said the decision was “broadly consistent” with the decision last year.
“We believe that user interest is best served by seeing more relevant ads, ensuring useful and informative advertising for a wide variety of different contexts,” Google said. “We also believe that consumers are smart and are not confused when they see a variety of ads displayed in response to their search queries.”
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