Machine Generated Keyword Advertising and Fair Trade Act

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Keyword advertising has become the go-to marketing approach for many businesses in the digital age. As AI technology matures, the services adopted to develop keyword advertising are also becoming more sophisticated.

For example, some companies are applying machine learning to detect trends in the digital world, so that companies can perform better forecasting and analysis when identifying the target keyword. In a recent ruling, the Fair Trade Commission (“FTC”) fined Agoda Company Pte of NT $ 1 million. Ltd. (“Agoda”) after finding that the keyword processed and selected via Agoda’s machine learning software implied the name of another company, hence the violation of section 25 of the Law on Fair trade.

The complainant filed a complaint with the FTC, stating that when the complainant’s business name was entered as a keyword on search engines, including Google and Yahoo !, Agoda’s paid advertising would be classified as top of the search results list. Agoda, on the other hand, said it has adopted a self-learning machine, which simply analyzes the phrases consumers enter when they visit Agoda’s website, to automatically recommend and buy the keywords targeted for. Agoda. In the present case, the name of the complainant’s company is one of the keywords recommended by the aforementioned Agoda automatic self-learning system. According to Agoda, the self-learning machine generates recommended keywords daily and automatically makes purchases based on its scan result, without further monitoring / inspection from Agoda. As such, Agoda argued that it should not be held responsible for the keyword analysis and purchasing performed by its self-learning machine, as it has no knowledge and no control over the analysis and purchase of keywords performed by the self-learning machine.

The FTC, however, has not sided with Agoda. First, the FTC notes that the keyword recommendation made by Agoda’s self-learning machine is based on analyzing the frequency and volume of phrases entered by consumers when they visit the website of Agoda. ‘Agoda. Thus, the very fact that the complainant’s company name is recommended by Agoda’s self-learning machine means that this company name has generated considerable economic interest in the market, and use by Agoda is unfair to abuse the reputation of the complainant’s company name, which is what Section 25 of the Fair Trade Act prohibits.

Additionally, the FTC postulates that when evaluating which keyword to buy, businesses should exercise sufficient care to determine whether the targeted keyword is the trade name or brand of another company, or if the use of such a keyword would cause confusion among Internet users regarding the source. of goods or services provided. In this case, Agoda was not diligent in adopting the name of the complainant’s company as a keyword and could not escape its liability.

While the use of machine learning and AI technology is prevalent in the digital marketing world, companies should always exercise caution in tracking the application of these automated processes. Companies should not turn a blind eye when applying the result generated by automated technologies and request a disclaimer of liability under the Fair Trade Act.

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