“Bait-and-switch” Search Engine Optimization Technique and Fair Trade Act Issues

In Internet marketing, search engine optimization (SEO) is often used to enhance search engine exposure and increase visit traffic of web-pages or websites. Frequently used SEO techniques include content optimization and keyword optimization, as well as increasing page load speed. SEO differs from keyword advertising. Although keyword advertising is also aimed at increasing visit traffic, it is basically a service offered by search engines themselves. In contrast, in the case of SEO, search engines are oftentimes a tool: SEO experts analyze their algorisms, especially those pertaining to natural search rankings, thereby making the marketed content more possible to be accessed by search engine users.

Under Article 25 of Taiwan’s Fair Trade Act (“FTA”), “no enterprise shall … have any deceptive or obviously unfair conduct that is able to affect trading order.” The Fair Trade Commission (“FTC”), the agency responsible for protecting fair trade, has held in several decisions that a buyer of keyword advertising would violate Article 25 if the keyword exploited is the buyer’s competitor’s business name, because the ads that pop up upon the keyword searches “are taking a free ride on the competitor’s business efforts, thus impairing market transaction order whose cornerstone is competition on price, quality, and other efficacies.” (e.g., FTC Decision No. 109056 & FTC Decision No. 110075).

When SEO marketing comes across FTA more complicated legal issues arise, because SEO includes a variety of techniques having different degrees of legal risks.  But it can be said with certainty that one SEO technique called bait-and-switch has a higher risk of violating Article 25.  By using this technique, the actor drives clicks from consumers to his/her own website, thereby increasing website traffic, even though the consumers are searching for unrelated content.  In a decision issued in this month, a local shopping platform and its affiliate company using this technique were fined NT$ 2 million and NT$ 800,000, respectively, by the FTC for committing an Article 25 violation (FTC Decision Nos. 111019 & 111020). 

According to the decision and news alert released by FTC, once the shopping platform’s system noticed a visitor was searching for a brand whose products were not listed on the platform, it would generate on the platform a marketing copy page embedding the brand in the page content.  When third party search engines like Google crawled through the platform, they would link this copy page.  Afterwards, when search engine users searched for that brand name, the platform would appear in the search results, and the search engine users would be prompted to click on it.  As a result, the platform’s visits and traffic would increase, even though the branded goods were not offered on the platform.

This conduct was found violating Article 25 of the FTA.  The FTC held that, by using this SEO bait-and-switch technique, the platform misled consumers into visiting its website, and traffic increase was just part of the scheme. Through this technique, visitors directed to the platform would compare and then might purchase similar products of other brands offered on the platform. Consequently, the originally searched-for brand’s business exposure would decrease.  As the FTC news alert put it, “this is tantamount to misleading consumers to ‘shop at the wrong bazaar.’”

The FTC stressed that, although the platform did not directly exploit a third-party brand through keyword advertising, its conduct caused unfair competition all the same to businesses selling goods of such third-party brands, because consumers’ normal search and purchase processes for these goods were disrupted and diverted. 

The platform has announced that it will appeal the FTC decision, all the way up to the court if necessary, so it is worthwhile to keep track of the subsequent development. 

In a digital age when search engines have become a necessity, search results exert undeniable influence on our buying behavior.  So no wonder businesses would make use of search engines’ functions to enhance their marketing.  Still, it is advisable to be aware of the red lines set by laws and practices and, as the laws and practices are ever changing, consult a law firm with extensive experiences to protect your interests.