Keyword advertising has become a widely adopted marketing strategy for websites to increase exposure. However, if its usage causes consumer confusion or presents misleading information that disrupts fair competition, it may violate Taiwan’s Fair Trade Act. To address this, the Fair Trade Commission (FTC) issued the FTC Disposal Directions (Guidelines) on Internet Keyword Advertisements (the “Guidelines”) on December 12, 2024. We provide an overview of it below.

I. Types of Conduct

Search engines aim to provide users with results that are relevant, not just identical, to the inputted keywords, thereby offering diverse and helpful information and reducing search costs. Keyword advertising or web design that uses other enterprises’ symbols to provide consumers with diverse and beneficial information, improve market efficiency, or reduce search costs is not necessarily unlawful if it does not exploit others’ reputation or efforts. However, if the overall content of such advertising or the advertiser’s other marketing measures mislead users into believing the two enterprises share the same source, product line, or corporate affiliation, or unfairly increases the advertiser’s website visits, it may harm the economic interests tied to another enterprise’s symbol and fail to provide consumers with accurate information or reduce search costs. If such advertising disrupts market order, it may constitute an obviously unfair conduct by exploiting the efforts of others under Article 25 of the Fair Trade Act.

The Guidelines provide two examples of such conduct:

1. Using Another Enterprise’s Symbols in Keyword Advertising

This refers to keyword advertisements that use another enterprise’s symbols in search results (e.g., titles, URL links) in a way that creates the false impression of a shared source or affiliation, thereby free-riding on another’s reputation to promote its own products or services. Such keyword advertisements can be categorized into two subtypes based on their presentation: (a) simultaneously displaying the symbols of both the advertiser and another enterprise, and (b) displaying another enterprise’s symbol alongside the advertiser’s URL link. According to the Guidelines, determining whether this conduct constitutes unfair competition requires considering whether the other enterprise has invested significant effort into its symbol exploited by the advertiser, and whether the conduct misleads people into believing the two enterprises share a common source or relationship, such as a partnership, affiliation, or sub-brand.

An example of keyword advertising simultaneously displaying the symbols of both the advertiser and another enterprise can be seen in a case involving RHINOSHIELD.[1] The respondent, Evolutive Labs Co., Ltd. (“Evolutive Labs”), which operates the RHINOSHIELD brand, was reported by the trademark owner of “小豪包膜” (SIOUHAO screen protector in Chinese characters). Evolutive Labs purchased keywords such as “小豪” (SIOUHAO in Chinese characters), “小豪包膜”, (SIOUHAO screen protector in Chinese characters) and “小豪包膜價錢” (SIOUHAO screen protector price in Chinese characters). Through keyword insertion, when users entered these keywords into search engines, search results displayed titles like “RHINOSHIELD Impact Protector, 小豪包膜 for Mobile Screens—Non-Glass Shatterproof Protectors”, alongside links to the RHINOSHIELD website operated by Evolutive Labs. This presentation could easily mislead users into believing that “RHINOSHIELD” and “小豪包膜” belonged to the same entity or had a cooperative relationship. Consequently, users originally searching for “小豪包膜” were diverted, unknowingly, to the RHINOSHIELD website, thereby reducing the complainant’s ability to reach potential customers and diminishing the economic value of “小豪包膜” as an enterprise symbol. This was deemed an obviously unfair conduct by exploiting the efforts of others, and Evolutive Labs was fined TWD300,000 (approx. USD10,000) by the FTC.

An example of keyword advertising using another enterprise’s symbol alongside the advertiser’s website link can be seen in a case involving Agoda and Booking.com.[2] The respondents, Agoda Company Pte. Ltd. (“Agoda”) and Booking.com B.V. (“Booking.com”), purchased the keyword “四方通行” (Si Fang Tong Xing in Chinese characters), which is a registered trademark of Si Fang Tong Xing Travel Co., Ltd. (“Si Fang Tong Xing Travel”). When consumers entered “四方通行” into search engines like Google, the search results displayed advertisements with titles such as “四方通行｜Deals For Late Bookers Up to 80% Off” or “四方通行—Highly Recommended by Bloggers”, accompanied by links to the respondents’ websites. The overall presentation of these keyword advertisements could easily mislead users into believing that Si Fang Tong Xing Travel was the same source or affiliated with Agoda or Booking.com. Consequently, due to confusion or unawareness, consumers who intended to search for “四方通行” may click on the keyword advertisements and would be directed to the respondents’ online booking platforms. This diverted potential customers away from Si Fang Tong Xing Travel and harmed the economic value associated with “四方通行”. By purchasing keywords based on the name of their competitor, Si Fang Tong Xing Travel, and independently displaying such name in the titles of the keyword advertisements, the respondents were deemed to have exploited the efforts of others to promote their own goods or services. This constituted an obviously unfair conduct of exploiting the efforts of others, and the FTC imposed a fine of TWD1 million (approx. USD31,000) each on Agoda and Booking.com.

2. Using Another Enterprise’s Symbols in Website Design

This refers to the improper use of another enterprise’s symbols in website design displayed in organic search results, thereby increasing the traffic to one’s website.

Organic Search Results refer to search engine results generated by algorithms based on factors such as user identity and the relevance of search content to webpage content, as opposed to paid advertisements. Webpages with higher relevance are ranked higher on the search engine results pages (SERPs), making them more likely to be clicked by users. The practice of enhancing a website’s ranking on SERPs by adjusting website content is known as Search Engine Optimization (SEO). The fundamental approach to SEO involves crafting webpage titles and descriptions.

An example of website design improperly using another enterprise’s symbols can be seen in a case involving pcone and buy123[3]. The respondents were the operator of the buy123 website, KUOBROTHERS CORP. (“KUOBROTHERS”), and the operator of the pcone website, MOBIX CORP. (“MOBIX”). The complainant was Yue Meng Bed Ltd., which owns the trademark “悅夢” (Yue Meng in Chinese characters) and sells the product “悅夢Mattress”. With keyword replacement integrated in the website design, when consumers entered specific product information (e.g., “悅夢 Mattress”) on the respondents’ websites, the system automatically generated web content related to that product (e.g., “Popular 悅夢Mattress Brand Recommendations—pcone”, “Bestselling 悅夢Mattress Search Results｜buy123”, or “Everyone Is Buying 悅夢Mattresses at buy123”). This automatically generated web content was then stored in the database. Subsequently, when other users searched for the product on a search engine (e.g., entering “悅夢” as a keyword), even if the respondents’ websites did not sell the product, they would appear in the search results with the misleading, automatically generated web content displayed as webpage titles and descriptions. This created the false impression that the product was available for purchase on the respondents’ websites, prompting users to click on the links. In response, the FTC imposed a fine of TWD2 million (approx. USD61,000) on KUOBROTHERS, and TWD800,000 (approx. USD25,000) on MOBIX.

II. Application of the Guidelines

The newly issued Guidelines are essentially a refinement of the existing FTC Disposal Directions (Guidelines) on the Application of Article 25 of the Fair Trade Act, isolating keyword advertising-related rules into an independent set of guidelines. This reflects the FTC’s intent to provide clearer guidance for this particular marketing practice. However, given the diverse forms of keyword advertising, the examples outlined in the Guidelines are not exhaustive. The Guidelines explicitly state that keyword advertising involving other circumstances that fall under Articles 21 or 25 of the Fair Trade Act, or relevant guidelines, will still be subject to those regulations. Businesses engaging in keyword advertising are advised to pay close attention to the Guidelines and all related legal provisions.

For your ease of reference, we provide the English translation of the Guidelines here.

This is a translation of the original article in Chinese, which can be found here. Translation by Catherine Chen and Hung-yi Yang.

If you have any questions about advertising or marketing regulations or require any additional information, please feel free to contact us through lhsu@winklerpartners.com.

Written on 3 January 2025 by Ling-ying Hsu and Helen Chen.

Translated on 17 March 2025 by Catherine Chen and Hung-yi Yang.

[1] See the FTC Decision No. 111015.

[2] See the FTC Decision No. 113030 and the FTC Decision No. 113031. See also the FTC Decision No. 110075.

[3] See the FTC Decision No. 111019 and the FTC Decision No. 111020.