The Court of Justice of S\u00e3o Paulo (TJSP) has ruled against most companies that use keywords from competitors in sponsored links on the internet \u2013 prominent advertisements sold by search engines. Last year, in 811 cases analyzed, the judges understood that the practice constitutes unfair competition, according to a survey conducted by Brunner Digital, a company that monitors and protects brands on the internet.<\/p>\n\n\n\n
And the trend, for now, is for these decisions to be upheld. In the only case in which the merits were analyzed by the Superior Court of Justice (STJ) \u2013 Peixe Urbano versus Hotel Urbano \u2013 the final straw was put in place at the end of March. The ministers rejected an appeal (divergence appeal) filed by Hotel Urbano to try to overturn the conviction.<\/p>\n\n\n\n
Companies also run the risk of having to pay increasingly large fines or compensation for sponsored links. In the case involving Magazine Luiza and Via, during Black Friday, a judge stipulated a fine of R$1.5 million if the conduct was maintained.<\/p>\n\n\n\n
There are tools on the market that can measure the amount of revenue lost from online sales due to customer diversion through the use of links sponsored by competitors. \u201cTo request due compensation, it is possible to prove that the diversion was practiced in Brazil, how many times the ad appeared and how often,\u201d says Daniel Filla, director for Latin America at the German company AdPolice, a specialist in brand protection on the Internet.<\/p>\n\n\n\n
Sponsored links are displayed in the search results of the largest search engines on the Brazilian internet. Every time a search user searches for the keyword that the advertiser is sponsoring, your ad will be displayed prominently, along with the results generated.<\/p>\n\n\n\n
In 2016, the 3rd Panel of the STJ unanimously ruled on the matter (REsp 1606781). It decided that the practice of unfair competition through the improper use of a trademark and customer diversion \u201cwas exhaustively proven by the finding of sponsored links adopting the expression Peixe Urbano and its variations as the keyword\u201d. At the end of March, when analyzing the embargoes of Hotel Urbano, the ministers understood that there was no divergent case in the Court to take the matter to the Section.<\/p>\n\n\n\n
According to Cl\u00e1udio Roberto Barbosa, partner at Kasznar Leonardos, a law firm specializing in industrial property, Summary n\u00ba 7, which prevents the reanalysis of evidence, makes it more difficult for sponsored link cases to reach the STJ. \u201cBut if you can prove that there is customer misappropriation, the decision of the second instance will be upheld,\u201d he says. \u201cIn August, for example, the STJ analyzed a sponsored link case [REsp 1541870], applied Summary n\u00ba 7 and confirmed a charge for moral damages of R$$ 20 thousand.\u201d<\/p>\n\n\n\n
In the United States and several European countries, the case law is the opposite of that in Brazil. It is understood that companies can buy keywords similar to their competitors' brands. It is enough to make the origin of the advertised products or services clear to consumers to avoid violating antitrust legislation.<\/p>\n\n\n\n
In Brazil, according to Barbosa, the trend is to protect. \u201cWhen there is a registered trademark or a clear distinctive sign of a company, it cannot be used as a keyword for a sponsored link,\u201d he says. \u201cIt is different in the case of brands that are not so distinctive, such as the same name for a biscuit and a newspaper.\u201d<\/p>\n\n\n\n
At the TJSP, the 1st Reserved Chamber for Business Law, for example, determined the payment of R$1,500,000 for moral damages, after concluding that the defendant's behavior, when using keywords referring to the competitor in Google Ads, \u201ccharacterizes unfair competition, in the sense of influencing consumers to hire the services provided by them\u201d (case no. 1006136-89.2020.8.26.0100).<\/p>\n\n\n\n
For the former advisor to the Administrative Council for Economic Defense (CADE), lawyer and professor at the University of Bras\u00edlia Ana Fraz\u00e3o, this is a case law that is attentive and in tune with the growing role of search engines in everyone's lives.<\/p>\n\n\n\n
From a competition perspective, Ana explains that it may be difficult for Cade to structure an investigation because it is complicated to define a relevant market. \u201cSeveral markets are involved at the same time,\u201d she says. \u201cBut the ultimate beneficiary of antitrust rules is the consumer, and Cade can even act ex officio, without the need for a complaint to investigate.\u201d<\/p>\n\n\n\n
The National Consumer Secretariat (Senacon), in a statement, states that it does not have specific rules on sponsored links. However, it states that it seeks to identify whether social networks comply with consumer protection standards and adopt preventive measures in their advertising policies or practices with advertisers. The objective is to \u201cprevent companies with a history or potential for harming consumers from using social networks to perpetrate abuse or even fraud against consumers.\u201d<\/p>\n\n\n\n
Google, also in a statement, says that Google Ads allows ads to be displayed in an area separate from the general search results. The company admits that it does not restrict the use of registered trademarks as keywords. However, it states that it only allows their use in the ad text by the trademark holder. \u201cThis is a common and legitimate practice of competition in the market,\u201d it says.<\/p>\n\n\n\n
When contacted by Valor, Magazine Luiza did not respond by the time this edition went to press. Via said in a statement that it does not comment on ongoing lawsuits.<\/p>\n\n\n\n