$500m fine puts AdWords in dock

Google Adwords have come under fire again after the search giant agreed to pay a $500m fine for taking ads from rogue online Canadian pharmacies – and assisting them through AdWords – in violation of US federal law.
Earlier this year, it was claimed the US authorities repeatedly warned the company it was running ads from illegal online pharmacies – offering everything from fake Viagra to penis enlargement drugs – but it carried on taking the money.
Google admitted that it “improperly assisted Canadian online pharmacy advertisers to run advertisements that targeted the United States through AdWords”. In addition to the fine, Google agreed to several compliance and reporting measures “to insure that the conduct… does not occur in the future”.
But Iain Connor, IP law expert at Pinsent Masons, says the case has done nothing to clear up the use of Google AdWords and that they are “as controversial as ever”.
“Trademark owners struggle with the fact that Google allows other companies to ‘buy’ their trademarks and the law remains uncertain with regards to the legality of this practice,” he said.
“When the AdWords programme steps over the line into areas of regulated activity, like the sale of pharmaceuticals, Governments will not allow Google to be used as a conduit for unlawful activity,” Connor said.
The scheme has proved controversial, particularly in France, where courts have ruled that Google cannot sell the right for companies to buy the right for their ads to appear when a rival’s trademark is searched for.
In March, the European Court of Justice (ECJ) ruled that Marks & Spencer infringed Interflora’s trademark rights by buying the florist’s name as a Google AdWord, overturning a High Court ruling in the UK.