October 2025
Taiwan’s Fair Trade Commission Fines Maternal and Infant Product Company for Using the Name of a Competitor in Keyword Advertising
On May 8, 2025, the Taiwan Fair Trade Commission (“FTC”) rendered Administrative Decision No. 114035 (the “Decision”), finding that the sanctioned company juxtaposed the competitor Mamaway Co., Ltd.’s (“Mamaway”) trademarks “mamaway” and “媽媽餵” with its own trademark “mamamia” as part of its Google keyword advertising. The FTC held that such conduct constituted “unfair conduct in exploiting another’s achievements,” which was likely to affect trading order, thereby violating Article 25 of the Fair Trade Act, and imposed an administrative fine of NT$50,000. This article summarizes the FTC’s reasoning and its criteria for determining whether the use of keyword advertising constitutes “unfair conduct in exploiting another’s achievements” under Article 25 of the Fair Trade Act.
1. Assessing Whether Keyword Advertising Constitutes “Unfair Conduct” Requires Balancing the Economic Harm Against the Reduction in Consumers’ Search Costs
Under Article 7(2)(2)(1) of the FTC’s Principles for Handling Cases under Article 25 of the Fair Trade Act, the use of words associated with another business entity’s name or symbols as keywords in online advertising is deemed a form of “unfair conduct in exploiting another’s achievements.” However, the FTC also recognized that when Internet users enter the name or symbol of a particular business entity into a search engine, their search intent may not be limited to that specific business entity but may extend to other entities with similar characteristics. Therefore, keyword advertising also facilitates access to more comprehensive information. Accordingly, the Decision clarifies that keyword advertising should only be deemed “unfair conduct in exploiting another’s achievements” if the economic harm caused exceeds the informational benefits derived from reducing search costs.
In the present case, the sanctioned company’s keyword advertisement displayed both parties’ trademarks side by side, which could easily lead Internet users to believe that the sanctioned company and Mamaway were affiliated or of the same business origin. The keyword advertisement did not help Internet users obtain more accurate or comprehensive information, and instead reduced Mamaway’s opportunity to reach potential customers. The FTC, therefore, concluded that the sanctioned company’s conduct constituted “unfair conduct in exploiting another’s achievements.”
2. In Practice, Keyword Advertising Is Often Deemed “Likely to Affect Trading Order”
Pursuant to Article 25 of the Fair Trade Act, a finding of “unfair conduct” must rise to the level of being sufficient to affect trading order so as to constitute a violation of that provision. In the present case, however, the FTC concluded that the sanctioned company’s conduct had reached such a level based solely on the number of impressions and clicks generated by the keywords “媽媽餵” and “mamaway”—namely, 10,238 and 11,607 impressions, and 634 and 1,629 clicks, respectively—without providing any further analysis or reasoning. This demonstrates that the FTC has maintained its previous stance and continues to adopt a highly lenient threshold in determining whether the statutory element of “being sufficient to affect trading order” is satisfied under Article 25 of the Fair Trade Act.
3. Business Entities Cannot Rely on the Delegation of Advertising Matters to an External Agency as a Defense under Article 25 of the Fair Trade Act
The sanctioned company argued that it should not be held liable because the entire advertising campaign had been outsourced to an external advertising agency and it had been unaware of the specific keywords used. The FTC rejected this defense, reasoning that the Google account used for this advertising campaign belonged to the sanctioned company, which also funded and benefited from the advertisement. Accordingly, the sanctioned company remained legally responsible for the unfair conduct under Article 25 of the Fair Trade Act.
In light of the foregoing, the FTC’s lenient threshold for finding violations of Article 25 indicates its continued strict enforcement stance toward keyword advertising. LTP, therefore, recommends that business entities carefully assess potential consumer confusion before adopting keyword advertising strategies to mitigate potential legal risks under the Fair Trade Act.
1. Assessing Whether Keyword Advertising Constitutes “Unfair Conduct” Requires Balancing the Economic Harm Against the Reduction in Consumers’ Search Costs
Under Article 7(2)(2)(1) of the FTC’s Principles for Handling Cases under Article 25 of the Fair Trade Act, the use of words associated with another business entity’s name or symbols as keywords in online advertising is deemed a form of “unfair conduct in exploiting another’s achievements.” However, the FTC also recognized that when Internet users enter the name or symbol of a particular business entity into a search engine, their search intent may not be limited to that specific business entity but may extend to other entities with similar characteristics. Therefore, keyword advertising also facilitates access to more comprehensive information. Accordingly, the Decision clarifies that keyword advertising should only be deemed “unfair conduct in exploiting another’s achievements” if the economic harm caused exceeds the informational benefits derived from reducing search costs.
In the present case, the sanctioned company’s keyword advertisement displayed both parties’ trademarks side by side, which could easily lead Internet users to believe that the sanctioned company and Mamaway were affiliated or of the same business origin. The keyword advertisement did not help Internet users obtain more accurate or comprehensive information, and instead reduced Mamaway’s opportunity to reach potential customers. The FTC, therefore, concluded that the sanctioned company’s conduct constituted “unfair conduct in exploiting another’s achievements.”
2. In Practice, Keyword Advertising Is Often Deemed “Likely to Affect Trading Order”
Pursuant to Article 25 of the Fair Trade Act, a finding of “unfair conduct” must rise to the level of being sufficient to affect trading order so as to constitute a violation of that provision. In the present case, however, the FTC concluded that the sanctioned company’s conduct had reached such a level based solely on the number of impressions and clicks generated by the keywords “媽媽餵” and “mamaway”—namely, 10,238 and 11,607 impressions, and 634 and 1,629 clicks, respectively—without providing any further analysis or reasoning. This demonstrates that the FTC has maintained its previous stance and continues to adopt a highly lenient threshold in determining whether the statutory element of “being sufficient to affect trading order” is satisfied under Article 25 of the Fair Trade Act.
3. Business Entities Cannot Rely on the Delegation of Advertising Matters to an External Agency as a Defense under Article 25 of the Fair Trade Act
The sanctioned company argued that it should not be held liable because the entire advertising campaign had been outsourced to an external advertising agency and it had been unaware of the specific keywords used. The FTC rejected this defense, reasoning that the Google account used for this advertising campaign belonged to the sanctioned company, which also funded and benefited from the advertisement. Accordingly, the sanctioned company remained legally responsible for the unfair conduct under Article 25 of the Fair Trade Act.
In light of the foregoing, the FTC’s lenient threshold for finding violations of Article 25 indicates its continued strict enforcement stance toward keyword advertising. LTP, therefore, recommends that business entities carefully assess potential consumer confusion before adopting keyword advertising strategies to mitigate potential legal risks under the Fair Trade Act.
