Founders Utilize Indian Court Ruling to Reinforce Criticism of Google’s Advertising Approaches

A recent decision from an Indian court concerning Google’s keyword advertising practices has garnered significant attention, particularly after the company’s founders asserted that this system has been exploited by rivals to deceive consumers, forcing businesses to allocate resources toward brand protection.

On May 22, the Delhi High Court delivered a verdict in a trademark lawsuit involving Hindware, a manufacturer of bathroom fittings, ruling that Google was liable for trademark infringement due to its keyword advertising techniques. The court awarded Hindware ₹3 million (about $31,600) in nominal damages.

In an extensive 163-page judgment (PDF), Justice Mini Pushkarna rejected Google’s claim that it acted merely as a neutral intermediary by displaying ads on its search platform. The judge highlighted that Google’s AdWords service allowed competitors of Hindware to bid on the keyword “Hindware,” thus leading consumers searching for the brand to their own products.

“By marketing the plaintiff’s [Hindware] trademark as a keyword without permission for profit, Google infringes upon the plaintiff’s exclusive rights to utilize its trademark under Section 28 of the Trade Marks Act,” the judge stated.

The ruling attracted notable attention on Friday, with various Indian entrepreneurs, including Nithin Kamath of Zerodha and Sridhar Vembu from Zoho, publicly supporting the decision. They contended that competitors frequently exploit Google’s advertising platform to divert traffic from leading brands, requiring higher investments in brand protection.

Kamath, reflecting on Zerodha’s ongoing challenges with this issue, tweeted: “When you search for ‘Zerodha,’ our site should be the top result. Yet, often, the leading search results on Google display ads directing consumers to a competitor’s site.”

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

“We are committed to adhering to local legal requirements while enforcing rigorous measures to safeguard the long-term interests of our users,” a Google representative informed TechCrunch.

Given that India is a crucial market for Google, with more internet users than any country except China, court judgments affecting its search and advertising practices hold substantial significance.

However, legal experts cautioned that the implications of this ruling might not be as far-reaching as many believe.

“This ruling could prompt platforms to reevaluate their practices to ensure that their automated systems do not indiscriminately promote or display trademarked terms to advertisers,” noted Aprajita Rana, a partner at AZB & Partners.

Nonetheless, Rana conveyed to TechCrunch that the ruling may not have a “significant 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 central issue in this case revolves around whether granting access to trademarked terms—even in the context of ad placements between online platforms and advertisers, which consumers might not recognize—could be perceived as complicity by the platforms,” Rana added.