Mercado Libre found guilty of unfair competition in Brazil keyword case
Ruling by 1st Business Court of São Paulo upheld trial court ruling favoring Verisure; marketplace purchased Google ad keywords that diverted consumers from plaintiff’s site
The 1st Business Court of São Paulo Court of Justice (TJSP) upheld a trial court ruling against Mercado Libre for engaging in unfair competition practices against security company Verisure. The court determined that the marketplace's illegal conduct involved purchasing the keyword “Verisure” for Google ads directing consumers to its site, thereby diverting potential buyers from Verisure’s own site.
The judges applied the TJSP's precedent. According to the XVII Statement of the Business Law Group, approved in 2022 and amended in 2023, “using the nominative element of a registered trademark belonging to another party, which has sufficient distinctiveness and operates in the same business sector, as a search term for advertising with online search providers constitutes an act of unfair competition.”
The unique aspect of this case is that it does not involve two companies in the same industry but rather a third party, a marketplace, and a specialized security company. Mercado Libre argues that because it does not conduct the same business activity, there is no unfair competition practice. It also claims that no ads with the Verisure brand were directly linked to its platform. The present ruling can be appeal
Verisure took the matter to court in April 2023 to prevent Mercado Libre from using its brand name in Google Ads. Judge Larissa Gaspar Tunala of the 1st Business and Arbitration Conflicts Court granted the request.
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