Two Taiwanese companies used search engine optimization (SEO) to incorrectly display specific brand names on search engine display results, misleading consumers to believe the stores were selling branded products to promote their own website visitation rates.
On April 12, 2022, the Fair Trade Commission ruled that this behavior violated Article 25 of the Fair Trade Law and imposed fines of 2 million and 800,000 New Taiwan dollars on the two companies, respectively.
The Fair Trade Commission said that when consumers enter a specific brand name into Google, the brand appears in search results. This is the result of those companies using SEO techniques. The Fair Trade Commission further explained that it is not opposed to SEO per se, but that the presentation of search results should not have the effect of misleading consumers.
When consumers search for information about a specific brand on Google, they may be attracted to misleading text from companies using SEO inappropriately. This behavior amounts to attracting consumers to the wrong street. This not only increases the visit rate to company websites, but can also persuade consumers to purchase other brands’ products, thereby reducing sales opportunities for the brands that consumers originally searched for.
In the past, the Fair Trade Commission has found that the use of a competitor’s company name or trademark as a keyword ad for a company, or the juxtaposition of the competitor’s company name or trademark competitor in a keyword ad, violates Section 25 of the Fair Trade Act. .
Although the companies in this case did not directly use other companies’ brands as keyword ads, the end result is still essentially “bait and switch” behavior, as well as disruption of normal consumer research and purchasing habits. This behavior also constitutes unfair competition with other operators who sell branded products.
If the inappropriate use of SEO remains unregulated, other competitors may imitate the behavior in the future, making it more difficult for consumers to distinguish the authenticity of information presented in search results and threatening the order of the e-commerce market competition and consumer interests. The Fair Trade Commission found that the act constituted deceptive and manifestly unfair behavior sufficient to affect the trading order and therefore decided that it violated Section 25 of the Fair Trade Act.
For more information on this subject, please contact Ruey-Sen Tsai at Lee and Li Attorneys at Law by phone (+886 2 2763 8000) or email ([email protected]). The Lee and Li Attorneys at Law website can be accessed at www.leeandli.com.