Google wins key EU ruling on luxury ads

Google wins key EU ruling on luxury ads

Brussels: Google Inc. won a key European Union court ruling Tuesday that says it did not violate luxury goods trademarks by allowing counterfeiters to buy brand names as advertising key words that link to their online stores.

The world’s most used search engine won some legal protection against future claims after the EU’s highest legal authority said it could not be held liable for advertisers’ requests to place ads if it removes them when it is told the ad misuses a trademark.

But the company is not completely in the clear. The European Court of Justice said the French companies who took the case headed by LVMH Moet Hennessy Louis Vuitton could still claim for compensation in a French court if it rules that trademark misuse damages their brands.

LVMH, the company behind Marc Jacobs bags, Dior perfumes and TAG Heuer watches said the ruling showed that Google could not fully escape its responsibility.

“This decision is a very important step in clarifying the rules covering online advertising where LVMH is one of the major customers," said the company’s vice president Pierre Code. “We want to work with all the players, including Google, to eradicate illegal practices online."

Google makes most of its revenue by selling advertising triggered by keywords. When someone searches for “vintage cars" or visits a partner site that mentions those words, advertising for a vintage car dealer may appear to the side. In some cases, a keyword that is a company’s brand name can trigger an ad for a competitor or even counterfeiters.

The French companies complain that Google broke the law by accepting ads using a brand name without permission. They fear that would allow counterfeiters to buy a keyword such as “Louis Vuitton" and use it to sell fake bags.

Google has been repeatedly sued for trademark violations in courts around the world, and it generally prevails or settles cases without changing its practices. In the United States and most other countries, Google typically accepts trademarks used as those keyword triggers, but it places limits on what can appear in ads themselves.

But in many European countries, including France, Italy and the Netherlands, Google does restrict the use of trademarks as keywords. It will typically strike ads, however, only after receiving a complaint from the trademark owner and conducting a review.