An old and well-established technique in search advertising: Bid on on your competitor’s trade name so your ad appears when potential clients search for your rival. Still, sounds like it should be a trademark violation. But courts generally have ruled the practice is legal. And Google doesn’t budge an inch: The company “won’t investigate or restrict the selection of trademarks as keywords, even if we receive a trademark complaint.”
This week, the Federal Trade Commission accused contact lens seller 1-800-Contacts of taking the keyword trademark law into its own hands. The agency says in a legal complaint that 1-800-Contacts threatened 14 competitors with trademark lawsuits to force them to sign an agreement stating they would not bid on each other’s trade names. All but one of the agreements took it a step farther and included a pledge to use “negative keywords” that would prevent each company from appearing for searches for the other companies, the FTC claims.
The net result, says the FTC, was less competition, both for the price of online advertising and for contact lenses.
The complaint comes to an administrative trial in April, 2017.
