Keyword advertising has become the go-to marketing approach for numerous businesses in this digital age. As AI technology matures, the services adopted for developing keyword advertising also get more sophisticated. For example, some businesses apply machine learning in detecting what is trending in the digital world, so that businesses could make better prediction and analysis when identifying the targeted keyword. In a recent decision, the Fair Trade Commission (“FTC”) imposed a NT$ 1 million fine on Agoda Company Pte. Ltd. (“Agoda”) after finding that the keyword processed and selected through Agoda’s machine learning involves the name of other business; thus, violates the stipulation of Article 25 of Fair Trade Act.
The complainant filed a complaint with the FTC, stating that when complainant’s own company name is input as keyword on search engine, including Google and Yahoo!, Agoda’s paid advertisement would be ranked at the top list of the search result. Agoda, on the other hand, stated that it adopted a self-learning machine, which simply analyzed the phrases input by consumers when they visited Agoda’s website, to automatically recommend and purchase the targeted keywords for Agoda. In this case, the complainant’s company name is one among the keywords recommended by Agoda’s aforesaid self-learning machine system. According to Agoda, the self-learning machine generates recommended keywords on a daily basis, and makes purchase based on its analysis result automatically without Agoda’s further monitoring/inspection. As such, Agoda argued that it should not be held liable for the analysis and purchase of keywords made by its self-learning machine, because it has no knowledge and control over the analysis and the purchase of keywords made by the self-learning machine.
FTC, however, did not side with Agoda. First, FTC notes that the recommendation of the keywords made by Agoda’s self-learning machine is based on the analysis of frequency and volume of phrases input by the consumers when visiting Agoda’s website. Thus, the very fact that complainant’s company name is recommended by Agoda’s self-learning machine means that such company name has gathered considerable economic interest in the market, and Agoda’s use is unfair for taking a free ride on the reputation of complainant’s company name, which is what Article 25 of Fair Trade Act prohibits. Additionally, FTC posits that when evaluating which keyword to be purchased, businesses should exercise sufficient care to determine whether the targeted keyword is the business name or trademark of other enterprise, or whether the use of such keyword would cause confusion among internet users regarding the source of supplied goods or services. In this case, Agoda failed to exercise due care for adopting the complainant’s company name as a keyword, and would not exempt itself from liability.
While the use of machine learning and AI technology is prevalent in the world of digital marketing, businesses should still exercise due care in monitoring the application of these automated processes. Businesses could not turn a blind eye when applying the result generated from the automated technology, and seek exemption from liability under Fair Trade Act.