Is it ethical to buy your competitor’s name in Google AdWords?

Last year I recorded some audio in a post about using a competitor’s name in Google’s Adwords. My post was inspired by a case on which I was working. My conclusion was that this practice was unethical and possibly illegal.

Recently, a writer from the Pittsburgh Post-Gazette who was working on a story on same topic contacted me. We discussed the issues and I am quoted in a Pittsburgh Post-Gazette story. My money quote is:

“I don’t believe it’s ethical,” said Shawn J. Roberts, a small business law attorney who researched this issue last year for a client. “If somebody is searching [Highmark] and they come across the first ad, not everybody is going to realize that they’ve been taken where they didn’t intend to go.”

Read more here.

What do you think, is buying your competitor’s name in AdWords, ethical or unethical?

Posted by Shawn Roberts

On this blog, I write about and try to answer practical Oklahoma legal questions. My focus and most experience is in estate planning and business issues including Oklahoma non-compete law. I make a living as an attorney in the law firm I founded, Cazes Roberts, PLLC in Oklahoma City. I live in Edmond with wife Amy and my two children, Sam (17) and David (9). We live precisely in the path of where the "wind comes sweeping down the plains."

4 comments

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shawnjroberts

Tim,

I appreciate you taking the time to comment. I know that you are very experienced working with Google AdWords and related products so your opinions are particularly valuable. I will try to answer your questions.

I made two arguments for why my client’s competitor could not buy (or bid upon) my client’s business name in AdWords:

1. Legally, this use violated by my client’s Trademark on its business name. Not all businesses have trademarked their name, but my client had. As a result, it had the right to determine how and when the name is used. I told the other business in writing that we considered this a trademark violation and that it must stop (cease and desist). I also notified Google about what was happening and that we considered trademark infringement and Google responded that it would remedy the problem by removing the offending words. Also, the competitor hired an attorney and then ended up agreeing to stop using my client’s name in Google AdWords.

2. Ethically, we believed it was a shady practice because it caused confusion and the goal of the practice was to benefit off of the goodwill that my client had built up with its name. Although some people might recognize when clicked on my client’s name (which came up first in the organic Google search result) and it took them to their direct competitor, many people would not. Simply put, if I see and the click on a link that says “Company X”, I should be able to count on going to “Company X” not somewhere else.

My opinion is that under your scenario it is the purchase of the name that could legal problems, regardless of what is done following the purchase.

Under your hypothetical, what is the purpose of purchasing the competitor’s name?

Interesting idea. I do think that purchasing your competitor’s company name as keywords, then essentially impersonating that company in the ad and/or on the resulting link would definitely be unethical. Obviously, the illegal part is more your expertise.

But let’s say I purchase my competitor’s company name, and then I make every effort to make it obvious that both the ad and the link are for my company, not theirs. Are you saying that’s unethical and illegal as well? If so, I’m curious what the justification is for the illegality.