Google has appealed against a Delhi High Court decision that found its advertising platform guilty of trademark infringement for permitting rivals to bid on brand keywords.
The company claims that limiting this practice damages consumer choice and establishes a monopoly. The initial conclusion that such bidding results in actionable trademark infringement is contested in the appeal, which characterises the decision as making India an exception in digital advertising norms, as reported by Money Control.
In a nation where Google generated $4.1 billion in gross advertising revenue last year but is also dealing with a number of antitrust cases and legal disputes, the May ruling may change the online ad market.
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Businesses bid on keywords that internet users enter into the search engine to make sure their advertisements are pushed by Google and target the appropriate consumers.
However, Hindware, an Indian manufacturer of bathroom fittings, accused its competitors of buying brand-related keywords on Google Ads so that their websites show up at the top of searches when users type in "Hindware".
Google was ordered to pay $31,600 in damages and other litigation costs after the Delhi High Court decided against it in the case.
Google claimed that the ruling makes India the "sole outlier" among international countries, with serious consequences for the digital advertising industry, online consumer choice, and competitive markets, in its 4,761-page lawsuit, which is not public but was examined by Reuters.
Google claimed in the July 7 submission that the decision will essentially give trademark owners a "monopoly over advertising space to the detriment of consumers." Researchers have noted that consumers may search for a brand to locate and evaluate alternatives.
Google stated that it is appealing the order because it "diverges from established legal precedents in India" in response to a request for comment from Reuters. It further stated that its advertising policies are in line with industry norms that promote competition.
Indian attorneys and IT specialists predict that if the initial decision is confirmed, it will have a significant impact on how the online advertising industry functions. For instance, the Indian dating service Shaadi.com claimed that it would transform the economics of internet advertisements for millions of companies that suffered when Google charged a fee and their rivals bid on their names, according to reports.
In the May ruling, Justice Mini Pushkarna stated that Google could not be allowed to escape accountability for providing a tool that causes trademark infringement. "Google has attempted to sell something that it simply does not own," Pushkarna said.
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Google argues that "a keyword is merely used as an internal and backend trigger to display an ad" and is merely "making advertising space available" in its appeal, rejecting the claim that it has violated trademarks.
Along with legal battles over AI training and more stringent content removal rules that started to apply to internet businesses in February, Google is also dealing with antitrust cases in India.
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