Utah is trying to pass a bill for the third time to regulate search ads. The bill finally passed in the Utah House (still needs to be approved by Senate) and it holds search advertisers liable for targeting trademarks as keywords. It does not hold the search companies, i.e. Google, Yahoo and Microsoft liable (that bill failed).
A comment from WebmasterWorld gave a rundown of the idea behind the bill:
This bill, sponsored by 1-800-Contacts, prevents search engines from being able to serve competitive ads if someone searches for a branded/trademarked keyword. So, for example, if someone Google’s ’1-800-Contacts’, Google would not be able to serve LensCrafters’ ad, even if Lenscrafter didn’t include the brand term in their ad copy.
Many search companies do not allow the trademarked terms to appear in the ad copy, but do allow bidding on many trademarked terms, as long as they are not in the ad copy. The legal precedent in this area has already made headlines and would have been thought to set the tone, so it comes as a surprise to some that the bill is passing. Eric Goldman said it “barely made it through due to the fierce last-minute lobbying efforts of 1-800 Contacts.”
Some advertisers will hate the law and some will benefit – naturally, no-one will agree on what the solution is, so Google, Yahoo and Microsoft seem to be the real winners as far as the final decision goes – at least if their real purpose is to deliver targeted information.
Because of the fact that e-commerce goes over state boundaries and because geo-targeting capabilities are often not 100%, the stability and longevity of this bill may not be as solid as some seem to think.