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Paid Listings / Fake Error Messages

When is it necessary to label links, search engine results, advertising banners?  

Study from the Pew Internet & American Life Project - Commercial Alert Complaint & Federal Trade Commission Investigation - Bonzi Software - „Trennungsgebot“ according to German Law (MDStV / TDG) - IntelliTXT - Mark Nutritionals against Overture, AltaVista, and Kanoodle - Google v. Louis Vuitton - Google v. American Blind - A "Code of Conduct" for search-engine operators? - Playboy vs. Netscape



Study from the Pew Internet & American Life Project


The latest report from the Pew Internet & American Life Project shows that Internet search engine users are naive when it comes to the objectivity and use of search engines. The survey found that 84% of online American adults have used search engines. That amounts to 108 million people. On any given day, 56% of those online use search engines. 87% of online searchers say they have successful search experiences most of the time, including 17% of users who say they always find the information for which they are looking.

Most search-engine users are unaware of the distinction between paid and unpaid results.

38% of those who have used a search engine are aware that there are two different kinds of search results, some that are paid or sponsored and some that are not. The remaining 62% are not aware of this practice. Among the 38% of internet users who are aware of the practice, some 47% of searchers say they can always tell which results are paid or sponsored and which are not. So only one in six internet searchers can consistently distinguish between paid and unpaid search results.


For more information see:

Commercial Alert Complaint & Federal Trade Commission Investigation

The consumer advocacy group Commercial Alert, which was founded by longtime consumer advocate Ralph Nader, filed a complaint in July 2001, requesting that the Federal Trade Commission investigate whether search engines are violating Section 5 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 45(a)(1) by failing to disclose that advertisements are inserted into search engine results lists.

After 11 months, the FTC said that paid listings must be clearly marked. The FTC choose not to take formal action at this time.  


A list of more articles is available here: Sullivan, Danny, Pay For Placement, SearchEngineWatch

Also see: Schulzki-Haddouti, Christiane, Die Suche nach Geld, C’t


Update 25, December 2004: Paying for Popularity - Search Engines and Paid inclusion

In 2002 the FTC issued a letter calling on the entire search engine industry to provide "clear and conspicuous disclosure" of paid placement and paid inclusion, the two primary methods of incorporating advertising into search results (also see an previous posting in the linking cases section). Paid-inclusion results simply show up in the ordinary results. Typically, users have no clue that their presence might owe more to cash payments than to the complex algorithms of a search engine. In November 2004 Consumer WebWatch,  a consumer advocacy group,  issued the study, "Searching for Disclosure," which evaluated the compliance of 15 major search engines with the FTC's guidelines.

Some Key findings:

  • Paid inclusion was not satisfactorily disclosed or explained by any of the search engines tested.
  • Meta-engines, which present results from several search engines simultaneously, repeatedly failed to adequately disclose the presence of paid placement and paid inclusion within search results.
  • Disclosures are generally hard to find, accessible by headings and hyperlinks that often blend in with the page, making them easy for consumers to overlook.
  • Information disclosed by the sites on business practices with advertisers - and how these practices may affect search results - was often confusing and jargon-laden.

So, search engines should make their disclosures of paid listings more visible and clear in the future.


Bonzi Software

On November 25, 2002 a class action lawsuit was filled against Bonzi Software, Inc. because of its allegedly deceptive advertising banners that impersonate computer error messages.

  • December 5, 2002: Olsen, Stefanie, “Security alert” ads pop up in court, ZDNet:
    "Web advertisements that masquerade as pop-up "security alert" windows generated by a surfer's computer or browser are the subject of a new class-action lawsuit, which aims to rid the Internet of the deceptive banners."

  • December 5, 2002: Trickbanner: Wer anderen eine Grube gräbt…, Heise:
    "Sie gewinnen keinen Schönheitspreis, sondern sehen aus wie Windows-Fehlermeldungen. Sie entstammen einer Zeit, als Durchklickraten das Maß aller Dinge in der Online-Werbung waren und haben schon so manchen User in die Irre geführt: Amerikanische Anwälte haben nun wegen Trickbannern, die beispielsweise den Eindruck einer Windows-Fehlermeldung erwecken, eine Klage eingereicht."

  • December 4, 2002: Cullen, Drew, Who will rid us of fake error message ads?, The Register:
    "A class action suit has been filed in Spokane County Washington against Bonzi Software, the maker of the fake error message banner ads you have all seen thousands of times."

  • December 4, 2002: Sammelklage gegen Bonzi Software, FutureZone:
    "Wegen des Erscheinungsbilds seiner Werbebanner steht dem Online-Werber Bonzi Software eine US-Sammeklage ins Haus."

„Trennungsgebot“ according to German Law (MDStV / TDG)


Mixing of editorial and advertising content continues - IntelliTXT is the most prominent of dozens of sites that use IntelliTXT. Vibrant Media describes its product as follows: "Vibrant Media’s patent-pending IntelliTXT technology highlights commercial text links from keywords appearing within pages of online content. Vibrant Media’s proprietary technology automates the analysis and categorization of content, identifies the most appropriate marketing message to deliver and, when activated by the user, dynamically serves advertising messages to the right user at the right time."

Links created by the software  are double underlined green words in text. Ads pop open in very small text windows when your cursor hovers over the green underlined word. Move the cursor away, and the ad window closes. Click in the ad window, and a new browser window opens to take you to the advertiser’s website. Unlike usual banners and pop-ups, these ads are right there in the content of an article. So what happened to "Anything that is an advertisement should be labeled as an advertisement"?

  • August 6, 2004: Werbung im Text,
    " hat nach Angaben der Direct Marketers News testweise mit der Übernahme von Intellitxt-Werbung begonnen. Dabei werden Werbe-Links in den redaktionellen Text eingebettet."
  • August 6, 2004: Terdiman, Daniel, Fark Sells Out. France Surrenders, Wired:
    ", one of the most popular blogs on the Net, has been accused of selling out -- joining a growing list of new-media outfits willing to bend old-media rules."
  • August 4, 2004: Bezahlte Links bei Fark,
    " ist sicher einigen Lesern ein Begriff. Vor allem jenen, die ihren Internet-Zugang nicht nur zum Arbeiten benutzen. Doch Fark könnte nun zum Auslöser für eine eigentlich schon überfällige Diskussion zum Thema "Verquickung von Content und Werbung" werden."

In December 2004 Forbes magazine ended its IntelliTXT experiment following concerns from the staff, which felt that the links might blur the lines between paid advertisements and staff-written copy.


Mark Nutritionals against Overture, AltaVista, and Kanoodle

Mark Nutritionals filed suit against Overture, AltaVista, and Kanoodle for selling their trademark, "Body Solutions," to their competitors, seeking $440 million in damages for alleged trademark infringement and unfair competition. All sued search engines have paid-placement listings that appear when searches are conducted for the term "body solutions." Body Solutions believes the ads are misleading consumers and infringing its trademark.

  • February 20, 2002: Sullivan, Danny, Lawsuit Over Paid Placements to Define Search Engines, Part 2, ClickZ:
    "A few weeks ago, AltaVista, FindWhat, Kanoodle, and Overture were slapped with a lawsuit filed by weight-loss product maker Mark Nutritionals, and the case has implications for the entire search engine industry." 

  • February 19, 2002: Sullivan, Danny, Lawsuit Over Paid Placements To Define Search Engines, SearchDay:
    "A new chapter in search engine law was opened last week, when Mark Nutritionals filed lawsuits seeking $440 million in damages for alleged trademark infringement and unfair competition against AltaVista, FindWhat, Kanoodle and Overture."

  • February 1, 2002: Saunders, Christopher, Weight Loss Company Sues Search Engines,
    "The diet firm, Mark Nutritionals, filed the suit in U.S. District Court in San Antonio, and seeks at least $10 million in compensatory damages and $100 million in punitive damages from each search engine, for what it termed a "willful attempt to mislead users" for their own financial gain."

  • January 31, 2002: Lafferty, Shannon, Seek and Ye Shall Find … or Not, The Recorder:
    "For Internet search engines, the "pay for placement" business model seemed like sheer marketing genius: Let businesses bid for search terms like "weight loss" or "auto repair," and program the engine so that the links popping up point to the highest bidder."


Google v. Louis Vuitton  

The civil court in Nanterre fined Google 75,000 euros for allowing advertisers to link text internet advertisements to trademarked search terms and gave the company 30 days to stop the practice. In the trademark case, the owner of the name "Bourse des vols" (Market for Flights) wanted Google to stop allowing competitors to include "Bourse des vols" as a term that would generate an advertisement and link to their own site. Google said it would appeal the decision.

Louis Vuitton also is suing Google and its French subsidiary for trademark infringement. Lawyers for Google and Vuitton  are to attend a preliminary hearing in Paris on November 3.

  • October 28: Louis Vuitton verklagt Google, Heise: 
    "Der französische Luxusgüter-Hersteller Louis Vuitton hat die Betreiber der Suchmaschine Google auf Schadenersatz verklagt, weil sie dessen Markenrechte durch die Platzierung von Werbebotschaften neben Trefferlisten verletzt haben sollen."
  • October 24, 2003: Frost, Laurence, Louis Vuitton sues Google for alleged trademark infringement online, Mercury News:
    "Google and its French subsidiary are facing another trademark challenge in the wake of a landmark ruling that could force the popular Internet search engine to change how it sells advertising."
  • October 24, 2003: Handbag maker Vuitton sues Google, CNN:
    "Louis Vuitton SA is suing Google and its French subsidiary for trademark infringement in the wake of a landmark ruling that could force the popular Internet search engine to change the way it sells advertising."
  • October 20, 2003: Google muss 75.000 Euro wegen Einblendung von Textwerbung zahlen, Institut für Urheber- und Medienrecht:
    "Die Eingabe von Adwords, die gleichzeitig Markennamen sind, darf nicht zur Auflistung von Textwerbung führen, die den geschützten Begriff enthält."
  • October 19, 2003: "Adwords" bei Google dürfen nicht auf fremde Werbung verweisen", Heise:
    "In Frankreich hat ein Gericht entschieden, dass Suchworte bei Google, die gleichzeitig Markennamen sind, nicht mehr auf Links von Konkurrenten verweisen dürfen, die diese Markennamen in ihre Werbung einbauen."


Google v. American Blind

American Blind sent Google a letter complaining that it was selling AdWords that infringed on its trademarks. Google places the sponsored links on the right side of of its results page. For example, if someone types ``American Blind & Wallpaper Factory'' into Google's search box, the advertisements of other companies are listed beside the search results, luring users to click on them. American Blind threatened a trademark lawsuit similar to one brought against Google by French handbag seller Louis Vuitton in August (In October a French court ordered Google to cease the practice and pay a fine).

Google asked the U.S. District Court, Northern District of California for declaratory judgment that its AdWords don't infringe on American Blind's trademarks and demanded a jury trial. The complaint filed November 26 states, "Google believes and maintains that descriptive terms (including terms such as 'blind,' 'wallpaper' and 'factory,' which are component parts of American Blind's trademark) are not entitled to any such treatment, and that Google's sale of keyword-triggered advertising does not violate the Lanham Act."


Google's Ad-Words (German / English)

  • December 5, 2003: Kuchinskas, Susan: Google Asks Judge to Lay Down Trademark Law,
    "Today, Google asked a U.S. district court to rule on whether some of the keywords it sells to advertisers infringe on the trademarks of American Blind and Wallpaper Factory."
  • December 5, 2003: Google Adwords in den USA auf dem juristischen Prüfstand, Heise:
    "Der Suchmaschinenbetreiber Google will vor Gericht klären lassen, unter welchen Bedingungen mit Suchbegriffen verknüpfte bezahlte Werbung mit dem US-Markenrecht kollidiert."
  • December 4, 2003: Olsen, Stefanie, Google wants ruling on search trademark law, CNet:
    "Aiming to pre-empt mounting complaints of trademark violations, search company Google has asked a court to rule on whether its keyword-advertising policy is legal."
  • November 21, 2003: Einstweilige Verfügung gegen, Heise:
    "Das Landgericht Hamburg hat in einem Beschluss vom 14. November (Aktenzeichen 312 O 887/03) verboten, weiterhin Werbeanzeigen für das Keyword "Preispiraten" zu schalten, wenn der Link auf die Domain verweist."
  • November 13, 2003: Google verbietet AdWords-Anzeigen für Dialer-Seiten, Heise:
    "Auch Google greift nun gegen Dialer durch: Werbeanzeigen für Seiten, die Dialer nutzen oder "den Gebrauch von Dialern fördern", sind ab sofort nicht mehr zulässig..."
  • November 5, 2003: Sullivan, Danny, Google Faces Fight Over Ads & Trademarks In France, Search Engine Watch:
    "Days after Google was fined by a French court for selling ads linked to the terms "travel market" and "airflight market," news emerged that Louis Vuitton launched its own trademark-related action against Google."
  • October 16, 2003: McCullagh, Declan, Google France fined for trademark violation, ZDNet:
    "A French court has ruled against Google France in an intellectual property dispute, saying the company must pay a fine for allowing advertisers to tie their text notices to trademarked search terms."
  • April 4, 2003: Steiner, Ina, Amazon to Put Google Ad Words & Search on Its Site , Auctionbytes:
    " and Google have announced a multi-year agreement that will make Google's search technology and targeted sponsored links available on"

Earlier this year, auction giant eBay asked Google to block advertisers from using its trademark in sponsored search results. eBay listed, in 13 pages, a wide selection of terms related to its trademarks. Google complied with some of its requests.

  • August 8, 2003: Olsen, Stefanie, Google ads a threat to eBay trademark?, CNet:
    "Auction giant eBay has moved to block Google advertisers from using its trademark in sponsored search results that appear on Google and across the Web."


A "Code of Conduct" for search-engine operators?

Bertelsmann Stiftung, the foundation which owns the german media giant Bertelsmann, published a study about the usage of search engines in Germany (see Transparency on the Internet: Search Engines, Bertelsmann Stiftung) and developed a “Code of Conduct” for search-engine operators that aims to ensure objective, transparent access to information on the Net.

  • October 24, 2003: Kodex für Suchmaschinen-Betreiber, futureZone
  • October 22, 2003: Kodex für Suchmaschinen, ZDF heute:
    "Gemäß einem neuen Verhaltenskodex wollen mehrere Betreiber von Internet-Suchmaschinen Werbung künftig eindeutig kenntlich machen. Grundlage ist ein Papier, das die Bertelsmann-Stiftung (Gütersloh) entwickelt hat."
  • October 22, 2003: Verhaltensrichtlinien für Suchmaschinenbetreiber, Heise:
    "Vor allem sollen die Suchmaschinenbetreiber für mehr Transparenz bei den Kriterien für das Ranking sorgen, gekaufte Links klarer kennzeichnen und auch Informationen über die Suchmaschinen-kompatible Gestaltung von Webseiten beziehungsweise Ausschlusskritierien für "Fälscher" bieten."
  • September 25, 2002: Transparenz im Netz: Die Suche im Internet erleichtern, Bertelsmann:
    "Bertelsmann Stiftung erforscht Suchverhalten von Internet-Nutzern und Qualität von Suchmaschinen."


Also see: 


Playboy vs. Netscape

The 9th U.S. Circuit Court of Appeals reinstated a trademark infringement lawsuit by Playboy Enterprises against Netscape Communications. Playboy accused Nestscape of violating its trademark by selling banner advertisements triggered by the terms "playboy" and "playmate." Playboy argued the links tarnished and diluted its brand name by associating its trademarks with inferior products. The decision reverses a district court ruling that dismissed the suit without a trial in 2000. 

A week after the appeals court ruling, the companies have reached a settlement in the case. The terms of the settlement have not been disclosed. The agreement puts an end to a case, which has been closely watched in the search engine advertising field.

  • January 29, 2004: Netscape einigt sich mit Playboy, Heise:
    "Der Streit zwischen der AOL-Firma Netscape und dem Erotikanbieter Playboy Enterprises ist beendet."
  • January 23, 2004: Olsen, Stefanie, Netscape, Playboy settle search trademark case, ZDNet:
    "Netscape settled a 5-year-old lawsuit brought by Playboy Enterprises, a week after a federal appeals court ruled that the Web company could be held liable for the unauthorized use of trademarks in search engine ads."
  • January 16, 2004: Playboy wins Net search trademark dispute, ZDNet:
    "A U.S. appeals court ruled on Wednesday that Playboy Enterprises Inc.'s trademark terms "playboy" and "playmate" should be protected even in Internet searches that prompt pop-up advertisements."
  • January 16, 2004: Playboy on top in internet ad dispute,
    "A US appeals court has overturned a ruling that Playboy trade marks may be used by search engines to display specific banner ads without the company’s authorisation."
  • January 16, 2004: Playboy gegen Netscape,
    "Ein US-Bundesgericht hat eine Klage des Entertainment-Konzerns Playboy gegen Netscape wieder aufleben lassen."
  • January 16, 2004: Olsen, Stefanie, Case threatens search engines' use of trademarks, ZDNet:
    "Playboy Enterprises will have its day in court over accusations that search engines sold its trademark as advertising without permission
  • January 15, 2004: Playboy darf doch gegen Suchmaschine klagen, Heise:
    "Der United States District Court for the Central District of California hat eine Klage des US-amerikanischen Erotik-Anbieters Playboy Enterprises gegen Excite und dessen Lizenznehmer Netcape Communications zugelassen."
  • January 15, 2004: Olsen, Stefanie, Web ad trademark law to be retested, CNet:
    "Dealing a potential setback to the Web search advertising market, a federal appeals court has reopened a lawsuit challenging the unauthorized use of trademarks in ads linked to search engine keywords."
  • January 15, 2004: Big Bunny Still Hopping Mad, Wired:
    "In a decision that could cast scrutiny over Internet search engines and online advertisers, a federal appeals court Wednesday reinstated a trademark infringement lawsuit by Playboy Enterprises against Netscape Communications."
  • September 15, 2000: Playboy-Klage gegen Suchmaschine erneut abgewiesen, Heise: 
    "Wenn Suchmaschinen nach der Eingabe von geschützten Markennamen gezielt Werbebanner Dritter einblenden, verstößt dies nicht gegen das US-Wettbewerbsrecht."


Linking Cases

There have been a lot of lawsuits concerning linking, framing and search engine issues in the last years. In this section you'll find short introductions into the different cases and links to news articles about it. 

An overview over featured cases can be found here!

Latest News - Update 71

Legal trouble for YouTube in Germany

Germany: Employer may google job applicant

EU: Consultation on the E-Commerce-Directive

WIPO Paper on tradmarks and the internet

The ECJ and the AdWords Cases



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