Beware the perils of internet advertising

An explosion in the use of media devices has opened up new doors for advertising. Picture: Getty

We are all using a plethora of media devices in our daily professional and personal lives. A recent Ofcom report shows just how much growth this sector is experiencing – 51 per cent of households have a tablet (more than doubled in 2 years). Virtually all adults use media devices and increasingly are accessing all kinds of information at home and on the move.

This explosion in the use of media devices, coupled with the seemingly unstoppable force of social media in recent years, has opened up new doors for advertising to ever wider audiences on a huge range of platforms. Of course businesses should be capitalising on the new options available to them, but should also be exerting some caution, as these legal developments show.

Nothing sells business quite like word of mouth recommendations. In a legal firm, for instance, 70-80 per cent of business is repeat business or referrals from existing clients. Before booking a holiday, virtually everyone looks for the opinion of someone who has been before booking. No wonder then that TripAdvisor has more than 100 million reviews on its website and boasts around 230 million online visitors each month. Undoubtedly customer testimonials are a great business development tool. But, beware! Any opportunity for leaving favourable comments also leaves scope for damage to be inflicted on your brand.

The Court of Session recently had a case involving TripAdvisor before it. The owner of a Scottish guest house which had received negative reviews on TripAdvisor, which were both anonymous and defamatory, went before the court, looking for it to order TripAdvisor to disclose who had posted the reviews. However, the court felt it could not make an order against TripAdvisor, which has no place of business in Scotland. Interestingly, this is different from the position in England, where the new Defamation Act provides that a website operator can be held liable for defamatory statements if they refuse to disclose the identity of an anonymous contributor.

Another advertising method on the rise is the use of key word advertising, such as through the use of Google AdWords. The effect is that when a consumer types a specific word into a Google search engine, a sponsored link advertisement appears on the search results page. While businesses are realising that this linked advertising is a good way to get in front of their target consumers, many businesses are now also, quite rightly, realising the value of their brand and seeking trademark protection, and are willing to take steps to enforce their intellectual property rights.

The High Court in England recently had to make a decision around the trademark held by UK cosmetics company Lush in respect of its Lush European Community trademark and Amazon’s use of keywords containing “lush” on Google AdWords to direct consumers to advertisements which would take consumers to the Amazon UK website and products similar to those sold by Lush. Amazon does not sell any Lush products.

Similarly, if a consumer entered the word “lush” into the search box on the Amazon site, consumers would be see products similar to those available from Lush.The court felt that: (1) the linked advertisements meant consumers were likely to expect to find Lush products available on the Amazon site; (2) search results comprising similar products to those sold by Lush when the word “lush” was entered as a search term were again likely to lead consumers to believe that they could buy Lush products through the Amazon site; (3) the average consumer would find it difficult to determine that the goods sold by Amazon were not Lush products; and (4) Amazon was using the Lush trade mark as an indicator of a class of goods, which could damage the trademark’s function of guaranteeing the source of the products bearing the mark.

The economy is improving and there are signs of more consumer willingness to spend. Businesses should keep in mind that the digital world has moved on and should be considering all the various platforms available to them to reach those consumers. However, with new developments always come new legal challenges so before embarking on any new strategies businesses should also make sure they fully understand the potential implications of what they are doing.

• Pamela Abbott is a solicitor with CCW Business Lawyers