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

A recent ruling by an Indian court regarding Google’s keyword advertising methods has rekindled interest following claims from its founders that competitors have long manipulated the system to divert customers, forcing businesses to allocate resources to protect their brand identities.

On May 22, the Delhi High Court delivered a verdict in a trademark dispute involving bathroom fittings company Hindware, concluding that Google was liable for trademark infringement related to its keyword advertising strategies, and awarded Hindware ₹3 million (around $31,600) in nominal damages.

In her detailed 163-page ruling (PDF), Justice Mini Pushkarna rejected Google’s assertion that it merely acted as a passive intermediary by displaying advertisements on its search platform. The judge pointed out that via its AdWords service, Google permitted competitors of Hindware to utilize “Hindware” as a keyword, targeting users searching for the brand.

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

The ruling gained attention on Friday when various Indian entrepreneurs, such as Nithin Kamath from Zerodha and Sridhar Vembu from Zoho, openly backed the decision, arguing that competitors have continuously exploited Google’s advertising platform to mislead traffic away from established brands, necessitating companies to invest in brand protection.

Kamath, reflecting on Zerodha’s decade-long struggles with this issue, stated on X: “When someone searches for ‘Zerodha,’ they should find our site directly. However, often the top results on Google Search lead to ads that divert customers to a competitor’s page.”

In response, Google stated that its Ads policy concerning trademark keywords “does not allow competitors to use trademarked terms in the ad text,” and confirmed this policy is enforced globally.

“We are dedicated to aligning our operations with local legal regulations while ensuring stringent measures to protect the long-term interests of our users,” a Google spokesperson shared with TechCrunch.

India represents a crucial market for Google, hosting more internet users than any nation except China, making court rulings that affect its search and advertising operations particularly significant.

However, legal experts cautioned that the repercussions of this ruling might be more limited than general sentiment suggests.

“This ruling will certainly encourage platforms to rethink their practices to ensure their automated systems do not indiscriminately promote or provide trademarked terms to advertisers,” said Aprajita Rana, a partner at AZB & Partners.

Nevertheless, Rana informed TechCrunch that the ruling may not yield a “far-reaching impact” on the liability of online platforms in India, as it has been previously determined that internet companies can lose legal protections if they engage in illegal activities.

“The vital aspect of this case is how granting access to trademarked terms—even within the framework of ad curation between online platforms and advertisers unknown to customers—might be perceived as a participatory action by the platforms,” added Rana.