New Regulations on Improper Use of Keyword Advertising

January 3, 2025

The term "keyword advertising" refers to a business purchasing advertising related to specific terms from an internet search engine provider. When users search for those specific terms, the provider places the links selected by the business in prioritized positions, significantly increasing the

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The term "keyword advertising" refers to a business purchasing advertising related to specific terms from an internet search engine provider. When users search for those specific terms, the provider places the links selected by the business in prioritized positions, significantly increasing the business's visibility. This type of advertising has become an important online marketing tool for businesses to promote their products and services.

A business purchasing keyword advertisements using another party's "business identifiers" or exploiting such identifiers through webpage programming is not inherently illegal. However, if such actions are deemed as "exploiting the fruits of another's efforts in a clearly unfair manner" and are sufficient to disrupt market order, they constitute "improper" use of keyword advertising, which violates Article 25 of the Fair Trade Act and may result in fines ranging from NT$50,000 to NT$25 million.

To eradicate illegal activities, in addition to the Fair Trade Commission Guidelines on Handling Cases Under Article 25 of the Fair Trade Act, the Fair Trade Commission further issued the Fair Trade Commission Guidelines on Handling Cases Related to Online Keyword Advertising on December 12, 2024. These Guidelines explicitly define the act of "exploiting the fruits of another's efforts in a clearly unfair manner," for example: purchasing specific names, trademarks, or business identifiers of another entity from search engine providers as keywords, causing consumers to see advertisements for the "business itself" or ads from both entities listed together when searching, thereby misleading consumers into believing that the two entities are in partnership, affiliated, or one is a sub-brand of another.

If a business's goodwill is exploited due to another company's use of keyword advertising, it may seek remedies under the Fair Trade Act, the Civil Code, the Consumer Protection Act, or other relevant laws. In addition, when placing advertisements, businesses should not be misled by marketing agencies and should proactively comply with the law to uphold fair and proper competition within the industry.