We have all been there: Searching for a specific product or brand on an online search engine, only to see competitive products or brands pop up in the search results. As a dedicated antitrust practitioner with a clear goal in mind (which is why you are reading this blog), this might not affect you. However, for those of us who are easily distracted (like me), it often leads to purchasing a different brand than originally intended. Naturally, this is not welcomed by all providers aiming to sell products or services online. A recent Swedish case addresses the consequences when such providers attempt to secure their search results.
What is the case about?
Admittedly, I can only rely on the machine translation of the original Swedish decision, but I believe this is entirely acceptable given my Swedish language the technical capabilities in 2025. Kry, a digital-first healthcare provider, reached an agreement with three of its competitors that they would not bid on the others parties’ brands on Google search.
For those unfamiliar with the process: Advertisers can bid for keywords by setting the maximum amount they are willing to pay per click. Online search engines then determine the ad position based on a so-called Ad Quality Score, which includes, inter alia the relevance and the bid amount. Many companies take advantage of this by bidding not only on their own brand names and generic terms but also on competitors’ brand names. As a result, when a user searches for a competitor’s brand, the company’s own ad will also be displayed. This often results in competitor ads showing up instead of additional information about the original keyword.
What is the potential harm to competition?
In its press release, the Swedish Competition Authority highlighted that, due to the agreement between the parties not to bid on each other’s brand names, consumers were not given the chance to consider alternatives to the digital-first healthcare provider they had searched for. Thus, it held that consumers’ ability to notice competing suppliers in the market was restricted.
Although not mentioned in the press release, the agreement between the healthcare providers could also negatively impact the affected online search engine, as it might reduce competition (and thereby prices) for specific keywords.
Sounds familiar?
Indeed, in its 2018 Guess case, the European Commission found that Guess’s restriction regarding online search advertising of their dealers violated Art. 101 TFEU. Guess had systematically banned its authorised retailers from using or bidding on Guess brand names and trademarks as keywords in Google AdWords in the EEA. According to the decision, Guess was concerned that allowing retailers to use or bid on Guess brand names in Google AdWords would increase its own advertising costs and also decrease the visibility and thus also the traffic of its own online shop.
The Commission held that this restriction did not serve a legitimate objective, in particular not the object to protect the brand image. The Commission concluded that potential trademark infringements could not justify the restriction, as brand-bidding by retailers would not confuse customers about the origin of the products. Furthermore, the Commission considered the agreement to restrict competition by object, since it reduced “the ability of authorised retailers to advertise and ultimately to sell the contract products to customers”.
The Commission has also acknowledged this in its Vertical Guidelines, stating that an “obligation not to use the supplier’s trademarks or brand names for bidding to be referenced in search engines” has the “object of preventing the effective use of the internet by the buyer to sell the contract goods or services”.
A sleeping giant?
The Swedish Competition Authority imposed fines totalling approximately EUR 2.3 million on the companies involved in the agreement. Considering the significance of online advertising and the rise in dual distribution activities, it might be surprising that there are not more publicly known cases on “online adword cartels”. Companies need to be aware of this antitrust issue. It is important to note that this issue may have both horizontal and vertical components. Thus, it might also be worthwhile to re-examine certain distribution agreements in this context.
By the way: When you search for Rocan on Google, no competitor can be found under the first 20 search results. So maybe they should start bidding on “Rocan”, unless…. 😉.
Photo by Timothy Gikas on Unsplash
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