Google loosening online advertising rules in Europe, but vows to better police misleading ads

Google loosening rules on online ads in Europe

PARIS — Google Inc. is loosening restrictions on using brand names in its lucrative European advertising business, a move that puts a greater burden on big-name retailers to protect their trademarks online.

The world’s largest search engine is promising at the same time to be more aggressive in taking down misleading ads, in response to a European court ruling concerning counterfeiters using Google’s ad service.

Wednesday’s announcement is Google’s latest maneuver in a global battle over who is responsible for policing the Internet.

The change affects advertising on Google’s European sites. It follows a similar change in the United States and Canada in 2004, and in Britain and Ireland last year.

Search engines and service providers say they are only platforms and can’t monitor all the gray business that goes on online. Leading retailers — such as France’s LVMH Moet Hennesy, whose Louis Vuitton bags are widely counterfeited — say they are losing business to rivals peddling fake goods via such sites as Google.

Google makes most of its revenue by selling the ads triggered by keywords typed into the search bar. So if a user searches for “handbags,” ads for handbag vendors often appear at the head of the search results or on the right-hand side.

Currently Europe is one of Google’s few major markets where the owner of a trademark can ask Google’s AdWords service to block other advertisers from using that trademark in keywords, Google spokesman Ben Novick said.

The European Court of Justice ruled in March that Google does not violate trademark law if counterfeiters buy brand names as ad keywords.

Google says it is committed to fighting counterfeiting but announced Wednesday that it is loosening its ad restrictions in Europe in response to the European ruling. Starting Sept. 14, any advertiser can use a brand name in its keywords.

Google is “narrowing what brand owners can control,” Novick told reporters in Paris, insisting that the decision will offer more options to users. In one example, he said a dealer of used cars will now be able to use the cars’ brand names in its keywords.

The European court ruling also said that Google must show that it is acting swiftly to remove an ad once told that an advertiser is misusing a trademark.

In response, Novick said Google is introducing a new system in Europe called AdRemoval to take down ads that are deemed “confusing.”

Officials at LVMH would not comment on Google’s changes. A long-running French legal dispute between Louis Vuitton and Google has been sent back to a lower court after the European decision, and a new trial is pending.

Observers are waiting to see how aggressively Google applies its new ad removal policy.

“The onus is on the rights-holders to be very pro-active and defend their rights,” said Inbali Isbeles of London-based law firm Ashurst, which has followed the legal battles involving online advertising. “The rights holders are not going to be able to rely on Google” for policing, she said.

Google has been repeatedly sued for trademark violations in courts around the world, and it generally prevails or settles cases without changing its practices. Its ad word business is worth about $20 billion a year.