This article first appeared on GuruFocus.
Alphabet (GOOGL, Financials) is facing fresh scrutiny in India after a court ruled that Google infringed a company’s trademark rights by allowing rivals to use its brand name as an advertising keyword.
The Delhi High Court ordered Google to pay $31,600 in damages to bathroom fittings maker Hindware. The court said Google allowed competing companies to bid on Hindware as a keyword to target their own ads.
The ruling has drawn attention from Indian entrepreneurs and brand owners, who say it could give businesses a clearer path to challenge keyword advertising practices.
For Google, the case matters because search advertising is built around keyword bidding. If more companies challenge the use of trademarks in ads, Google could face added legal risk in one of its most important markets.
Some Indian business leaders said the ruling could change the economics of online advertising because brands often pay to defend their own names against rivals. Google has not commented on the ruling.
