Initial decision in FTC 1-800 case finding that anti-keyword agreements violated antitrust law

Agreed-on limits on advertising, like agreed-on limits on other inputs, risk being a per se violation of the antitrust laws.  Here, a blanket ban, including a negative keyword requirement (so that someone bidding on “contacts” wouldn’t get ads run against “1-800-Contacts” based on broad matching), was not justified by fear of trademark infringement/confusing consumers.  The ALJ also notes that 1-800’s extensive evidence that people often can’t distinguish between organic and paid results has nothing to do with whether they can distinguish between results for 1-800 and results for its competitors.  Initial ruling here.  NB: I testified for the FTC, but the ALJ doesn’t rely on my testimony.

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