Google Adwords · Legal · Legal News

Google Adwords: Legal Issues

Finally, new blog post after a long period of hibernation. Two obvious reasons for such an extensive delay, lack of time for dedicated blogging, and never-ending search for topics which will result in interesting posts. At last, got both of them.

After a continuous search for a topic, which may be covered in a series of posts, pinned down on GOOGLE ADWORDS, which is one of the most happening discussions since past few months.

This post will cover just few basic issues, and the subsequent posts will cover review of litigation across multiple jurisdictions, along with other related issues.

To begin with, as we all know, keyword advertising is an essential revenue stream for search engines. Consequently, several lawsuits threaten this revenue model and could cut into the revenue streams of Google, Yahoo, and others. Precisely, Google’s adwords are a quick and simple way to purchase highly targeted cost-per-click (CPC) advertising, regardless of your budget. AdWords ads are displayed along with search results on Google, as well as on search and content sites in the growing ad network, including AOL, EarthLink, HowStuffWorks, & Blogger etc. When a person creates a Google AdWords ad, he chooses keywords for which his ad will appear and specify the maximum amount he is willing to pay for each click. Thereafter, he only pays when someone clicks on his ad.

Now, where is the legal problem? Google’s AdWords service allows advertisers to sponsor particular search terms. Whenever that term is searched the advertiser’s link will appear next to the search results. A company can choose a trademark protected term as keyword. So if you enter “trademark protected term” in the Google search box and hit “Search”, you would get listings from advertisers who paid for placement with this keyword. Google puts those listings off to the right side of the screen, clearly marked as ads. Trademark owners are concerned about their brand awareness and insist that this behavior violates their trademarks.

If we see Google’s FAQ, it states: “As a provider of space for advertisements, we cannot arbitrate trademark disputes between advertisers and trademark owners. As stated in our Terms and Conditions, advertisers are responsible for the keywords and ad text that they choose to use. We encourage trademark owners to resolve their disputes directly with our advertisers, particularly because the advertisers may have similar advertisements on other sites. As a courtesy, we are willing to perform a limited investigation of reasonable complaints. When we receive a complaint from a trademark owner, our review is limited to ensuring that the advertisements at issue are not using the trademarked term as a keyword trigger. If they are, we disable those keywords from the ad campaign….”

Google Adwords – TYPOSQUATTING 

Generally, Typosquatting, also known as URL hijacking, is an act of purchasing a domain name that is a variation on a popular domain name with the expectation that the site will get traffic off of the original site because of a user’s misspelling of the name. For example, registering the domain names webapedia.com or yahooo.com in the hopes that someone making a typo will get to that site unexpectedly. Now, Google may earn as much as $497m a year from typosquatters, according to a study from Harvard professor and noted Mountain View critic Ben Edelman. They estimate that at least 938,000 domains are typosquatting on the top 3,264 “.com” websites, waiting for unsuspecting web users to mistype or misspell a url. And 57 per cent of these “misspelled” domains, they say, include Google pay-per-click ads.

A detailed document for identifying “typosquatting” may be found by clicking here.

As we know, Google offers a service known as “AdSense for Domains,” which is specifically designed to enable so-called “parked domains” – domains that do little more than serve ads. Mountain View’s terms of service prohibit trademark violations – which includes typosquatting, a practice that goes against US law – and the company says it will remove violating domains if it finds them or is “made aware of” them.

But despite this policy, it is contended that Google is harboring thousands of these domains – and pocketing some serious revenue as a result. After crawling more than 285,000 typo domains to analyze their revenue sources, they found that around 80 per cent were supported by pay-per-click ads, and it’s no surprise that Google ads were by far the most prevalent.

Pulling in traffic data from Alexa – and extrapolating their numbers across the top 100,000 sites – the Harvard pair estimate that typosquatting domains receive at least 68.2 million hits a day. “If these typo domains were treated as a single website, that site would be ranked by Alexa as the 10th most popular website in the world,” they write, “It would be more popular, in unique daily visitors, than Twitter.com, Myspace.com, or Amazon.com.”

Google doesn’t disclose revenues from AdSense for Domains, but Edelman and Moore use third-party studies to estimate that Google’s average revenue per misspelled domain visit is around 3.5 cents. With their crawls indicating that Google ads are used on about 57 percent of typo domains, they say that Mountain View is pulling in about $497m from ad partners typosquatting on the top 100,000 websites. They also say that of the typo domains showing Google ads, 63 per cent are using one of just five advertising IDs. In other words, the practice could be significantly reduced by knocking out just five ad accounts.

Furthermore, in the United States, the 1999 Anticybersquatting Consumer Protection Act (ACPA) contains a clause (Section 3(a), amending 15 USC 1117 to include sub-section (d)(2)(B)(ii)) aimed at combating typosquatting.

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