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

A recent verdict from an Indian court concerning Google’s keyword advertising practices has garnered renewed focus after its founders claimed that competitors have long taken advantage of the system to mislead consumers, prompting businesses to invest in safeguarding their brand identities.

On May 22, the Delhi High Court rendered a decision in a trademark case involving Hindware, a bathroom fittings firm, ruling that Google was liable for trademark infringement because of its keyword advertising methods and awarded Hindware ₹3 million (around $31,600) in nominal damages.

In her comprehensive 163-page ruling (PDF), Justice Mini Pushkarna rejected Google’s assertion that it merely acted as a passive intermediary by displaying ads on its search platform. The judge pointed out that through its AdWords service, Google permitted Hindware’s rivals to bid on “Hindware” as a keyword, thus targeting customers searching for the brand.

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

The ruling drew attention on Friday as several Indian entrepreneurs, including Nithin Kamath of Zerodha and Sridhar Vembu of Zoho, publicly endorsed the decision, contending that competitors have routinely misused Google’s advertising platform to divert traffic from established brands, forcing companies to dedicate resources to brand protection.

Kamath, reflecting on Zerodha’s decade-long battles with this issue, expressed on X: “When searching for ‘Zerodha,’ our site should be the top result. However, frequently the leading results on Google Search lead to ads diverting customers to a competitor’s website.”

In response, Google claimed that its Ads policy regarding trademark keywords “prohibits competitors from using trademarked terms in the ad text,” affirming that this policy is applied globally.

“We remain committed to following local legal frameworks while implementing stringent measures to protect the long-term interests of our users,” a Google spokesperson told TechCrunch.

India represents a crucial market for Google, with more internet users than any country except China, making court decisions impacting its search and advertising operations particularly important.

However, legal experts cautioned that the ramifications of this ruling might be more limited than commonly believed.

“This decision will undoubtedly encourage platforms to reevaluate their practices to ensure their automated systems do not indiscriminately promote or provide trademarked terms to advertisers,” stated Aprajita Rana, a partner at AZB & Partners.

Nonetheless, Rana informed TechCrunch that the ruling might not have a “far-reaching impact” on the liability of online platforms in India, as it has been established that internet companies risk losing legal protections if they engage in unlawful activities.

“The key issue in this case is how allowing access to trademarked terms—even in the context of ad placements between online platforms and advertisers unknown to consumers—could be interpreted as a participatory action by the platforms,” added Rana.