Founders Utilize Indian Court Ruling to Bolster Criticism of Google’s Advertising Practices

A recent decision by an Indian court regarding Google’s use of keyword advertising has garnered considerable attention, particularly after the company’s founders asserted that competitors have exploited this tactic to mislead consumers, leading to increased expenses for businesses striving to safeguard their brands.

On May 22, the Delhi High Court made a ruling in a trademark dispute involving Hindware, a manufacturer of bathroom fittings, finding Google accountable for trademark infringement due to its keyword advertising practices. The court required Google to pay Hindware ₹3 million (around $31,600) in nominal damages.

In an extensive 163-page ruling (PDF), Justice Mini Pushkarna rejected Google’s claim that it solely acted as a neutral intermediary by displaying ads on its search engine. The judge highlighted that Google’s AdWords allowed competitors of Hindware to bid on the keyword “Hindware,” redirecting consumers searching for the brand towards competing products.

“By utilizing the plaintiff’s [Hindware] trademark as a keyword for profit without authorization, Google infringes upon the plaintiff’s exclusive trademark rights under Section 28 of the Trade Marks Act,” the judge remarked.

This ruling has received significant attention, with various Indian business leaders, including Nithin Kamath of Zerodha and Sridhar Vembu from Zoho, voicing their support. They contended that competitors frequently exploit Google’s advertising platform to divert traffic from established brands, increasing the necessity for brand protection expenses.

Kamath discussed Zerodha’s ongoing challenges with the issue, tweeting: “When you search for ‘Zerodha,’ our site should be at the top. Yet often, the leading Google search results show ads directing users to competitors’ sites.”

In response, Google emphasized that its Ads policy concerning trademark keywords “prevents competitors from using trademarked terms in ad text,” underscoring the global nature of this policy.

“We are dedicated to adhering to local legal requirements while implementing effective measures to protect the long-term interests of our users,” a representative from Google informed TechCrunch.

Given that India is a vital market for Google, with more internet users than any other country except China, court rulings affecting its search and advertising practices hold significant importance.

However, legal experts have cautioned that the ramifications of this judgment may not be as far-reaching as some expect.

“This ruling may prompt platforms to reassess their practices to ensure that their automated systems do not inadvertently promote or display trademarked terms to advertisers,” explained Aprajita Rana, a partner at AZB & Partners.

Nonetheless, Rana advised TechCrunch that the ruling may not lead to a “significant impact” on the liability of online platforms in India, given that it is already understood that internet companies risk losing legal protections if they engage in unlawful activities.

“The central issue in this case is whether permitting access to trademarked terms—even concerning ad placements between online platforms and advertisers, which consumers may not recognize—could be interpreted as complicity by the platforms,” Rana added.