Two Taiwanese companies used search engine optimization (SEO) to misrepresent certain brand names in search engine display results, leading consumers to mistakenly believe the stores were selling certain branded products to boost their own website visit rates.
On April 12, 2022, the Fair Trade Commission ruled that this behavior violated Article 25 of the Fair Trade Act and fined the two companies 2 million and 800,000 new Taiwan dollars, respectively.
The Fair Trade Commission explained that when consumers type a specific brand name into Google, the brand appears in the search results. This is because these companies use SEO techniques. The Fair Trade Commission went on to say that while it is not opposed to SEO per se, the display of search results should not have the effect of misleading consumers.
When consumers search Google for information about a specific brand, they may be drawn to misleading text from companies using SEO incorrectly. This behavior is tantamount to misleading consumers. Not only does it increase the rate of visits to the companies’ websites, but it can also lure consumers into buying products from other brands, thereby reducing the chances of selling the brands that consumers were initially looking for.
In the past, the Fair Trade Commission has found that using a competitor’s company name or trademark as a keyword advertisement for a business, or juxtaposing the competitor’s company name or trademark in a keyword advertisement, violates Article 25 of the Fair Trade Act.
Although the companies in this case didn’t directly use other companies’ brands as keyword ads, the end result still essentially represents “bait-and-switch” behavior, disrupting consumers’ normal search and buying habits. This behavior also constitutes unfair competition with other suppliers of branded products.
If abusive SEO usage remains unregulated, other competitors may mimic the behavior in the future, making it difficult for consumers to distinguish the authenticity of the information presented in search results and endangering the competitive order of the e-commerce market and the interests of consumers. The Fair Trade Commission considered that the act constituted fraudulent and manifestly unfair conduct sufficient to affect the transaction order and therefore ruled that it violated Article 25 of the Fair Trade Act.
For more information on this topic please contact Ruey Sen Tsai at Lee and Li Rechtsanwälte by phone (+886 2 2763 8000) or by email ([email protected]). The Lee and Li Attorneys at Law website can be accessed at www.leeandli.com.
