Amazon Sued Over Google Ads Bought By Affiliates

from the this-won't-last-long dept

Mon, Dec 21st 2009 4:52pm — Mike Masnick

Ah, yet another lawsuit over Google ads. These just never seem to stop. The latest, found via Michael Scott, has a few interesting elements, however. In this case, a small online retailer of used cameras and electronics, Sellify, is suing Amazon, not over its own ads, but ads of Amazon affiliates. The two main complaints are over trademark violations of buying keywords, and then defamation. Defamation? Yes, because apparently when people do searches on Sellify or some of its related trademarked names, like OneQuality, some of the ads that come up say things like:

Beware of the SCAM Artist
Camcorders at the Best Price
From the Trusted Source
amazon.com

So that's a bit different than the usual keyword advertising claim. The only problem, of course, is that these ads are placed by Amazon affiliates, and any defamation claim almost certainly should fall under a Section 230 safe harbor that protects Amazon. The claims in the lawsuit that Sellify notified Amazon are meaningless. Basically, Sellify is suing the wrong party. They might have an argument if they sued the affiliates in question, but they appear to have chosen to focus instead on the big, easy target. But, the whole purpose of Section 230 is so that you can't just focus on the big, easy target, but have to sue those actually responsible.

Now, trademark claims, however, are not covered by Section 230, so we're back to the standard legal questions in these sorts of competitive keyword advertising claims. But this has been covered a lot, and many courts have found that there is no trademark violation in competitive ads on trademarked keywords, so it's hard to see that one getting very far either. It seems like the only argument the company might have is a potential defamation claim if it were filed against the affiliates. But the lawsuit against Amazon seems like a long shot.

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Filed Under: ads, defamation, section 230, trademark
Companies: amazon, google, onequality, sellify

19 Comments

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Anonymous Coward, 21 Dec 2009 @ 5:17pm

If they told amazon that this third party was using the amazon.com name in the advertisement, and amazon did nothing, then they might use that to show that amazon approved and allowed the third party to use their name to infer that this company was running a scam. That would be somewhat difficult to prove of course.
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Mike Masnick (profile), 21 Dec 2009 @ 5:34pm

Re:
If they told amazon that this third party was using the amazon.com name in the advertisement, and amazon did nothing, then they might use that to show that amazon approved and allowed the third party to use their name to infer that this company was running a scam.

Doesn't matter. Section 230, for the most part, doesn't care if you know and approve of what's being done. On copyright it's a different story, but Section 230, that's meaningless.
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Nicholas Moline (profile), 21 Dec 2009 @ 5:41pm

Re: Re:
Mike is quite correct, furthermore, amazon can't do anything about ads placed on google (not amazon) by someone other then themselves. Had amazon created the ad, they could have responded by taking it down.

Had they petitioned Google to remove the defamatory ad, Google may have done it as a violation of their terms of service, but even suing Google wouldn't have gotten anywhere.

Had they sued the person that actually placed the ad, then they could have gotten somewhere with the suit, though they would have to know who that was, they could have sued John Doe and subpoenaed Amazon for who owned that affiliate account.

What's funny is the affiliate probably didn't get any money from someone clicking those ads. Earlier this year Amazon changed their Affiliate program to state that ads placed on search results are not eligible for payment under the affiliate program.
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The Anti-Mike, 21 Dec 2009 @ 6:48pm

Re: Re:
The problem here is that Amazon isn't a "230" party in this game, they are a business partner with their affiliate. Legal action against Amazon is a very expedient way to get action against the affiliate if there is any issue.

Amazon isn't an innocent host in the matter, they profit very directly from the sales made using these methods.
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OP, 21 Dec 2009 @ 6:50pm

Re: Re:
After reading the actual complaint, I don't think they really have a case. Granted Amazon should have immediately suspended Cutting Edge Design's affiliate account, which they didn't do until it was clear that Sellify was going to sue them, but Sellify seems to think that Amazon has some way of removing the ad. What I don't understand is why they didn't contact Google. I'm pretty sure Google would have taken the ad down immediately. It's clearly defamatory. I'm surprised they didn't sue Google too (not that they had a case their either).

I still don't think Section 230 comes in to play here though, since it has nothing to do with anything actually on Amazon's server.
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Anonymous Coward, 21 Dec 2009 @ 8:48pm

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They probably did so using only one click
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Anonymous Coward, 21 Dec 2009 @ 9:01pm

Re: Re: Re:
You might want to look at the 3 prongs that the CDA actually requires for eligibility, and 230(c)(1).
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Mike Masnick (profile), 21 Dec 2009 @ 10:09pm

Re: Re: Re:
The problem here is that Amazon isn't a "230" party in this game, they are a business partner with their affiliate. Legal action against Amazon is a very expedient way to get action against the affiliate if there is any issue.

Doesn't matter under section 230. You are wrong in your analysis.

Amazon isn't an innocent host in the matter, they profit very directly from the sales made using these methods.

Again, this absolutely does not matter.

I have explained this to you specifically multiple times. Why you insist on misstating the law is beyond me.
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Lucretious, 22 Dec 2009 @ 1:42am

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The Anti-Mike, 22 Dec 2009 @ 6:30am

Re: Re: Re: Re:
Mike, I don't misstate the law - you are playing one side of the law, and lawyers have also argued and won on the other side of the law as well.

Amazon isn't an innocent host in this. They are business partners with the people posting the ads. They aren't providing hosting, they aren't providing only a service, they are paying commissions on sales made by their contracted affiliates.

Hey, believe what you like, but honestly, you need to get better legal advice, because the people you are working with are only giving you half the story.
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Mike Masnick (profile), 22 Dec 2009 @ 10:13am

Re: Re: Re: Re: Re:
Mike, I don't misstate the law - you are playing one side of the law, and lawyers have also argued and won on the other side of the law as well.

Name one. Seriously. Name one lawyer who has won a case where they said that someone "isn't a "230" party" because they have a business relationship with another party.

Go ahead. I'm waiting.
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The Anti-Mike, 22 Dec 2009 @ 10:18pm

Re: Re: Re: Re: Re: Re:
I can't think of any, because no company has been stupid enough to try to use it as a defense. Proving something in absence of a judgement is rather difficult. You know that, you are just trying to mock me. Hey, can you show me a single example of this type of situation in an affiliate relationship that was successful defended under "230"? Go ahead, I am waiting oh guru of everything!

This isn't like a file host or similar. Amazon isn't a host - they are selling stuff, and contracting to affiliates for promotion of their products. In the brick and mortar world, a misleading or dishonest advertising of a product by a franchisee of a chain might also get the chain in trouble. This isn't really very different.

Amazon is the company that can take the quickest action to rectify the issue, as they hold the purse strings. If the traffic no longer made it to Amazon, the affiliate would very quickly stop their campaign or risk losing significant money. Attempting to go after the affiliate directly and alone might not give the same results. Further, Google might also not want to get involved until there is a judgment or at least an injunction. Thus, going after Amazon and requesting that they control their affiliates is an efficient way to get the job handled in the shortest amount of time.

Amazon has at least some control over the situation, and they can discontinue their business arrangements with the affiliate, which would resolve the issue completely. It wouldn't be any different from Amazon terminated and advertising agency who produced and published similar style ads in print without permission.
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Mike Masnick (profile), 23 Dec 2009 @ 12:59am

Re: Re: Re: Re: Re: Re: Re:
Ha!

Ok. Your last comment was:

"lawyers have also argued and won on the other side of the law as well."

I asked you to provide a single example.

Your response:

"I can't think of any, because no company has been stupid enough to try to use it as a defense."

Honestly. You claim that it had been used and won, and then you claim that no one would be stupid enough to use that as a defense.

You clearly have no interest in rational discussion. I caught you in a flat up lie, and you don't even seem to realize it. Rather than admit you are wrong, you simply change your story completely. Yikes.

Hey, can you show me a single example of this type of situation in an affiliate relationship that was successful defended under "230"? Go ahead, I am waiting oh guru of everything!

Many lawsuits have been brought against Google for actions of its advertisers (a business relationship nearly identical to Amazon and its affiliates) and they have regularly been dismissed on Section 230 grounds.

A recent case would be Goddard v. Google but we can backtrack and list out some more if you'd like.

This isn't like a file host or similar. Amazon isn't a host - they are selling stuff, and contracting to affiliates for promotion of their products. In the brick and mortar world, a misleading or dishonest advertising of a product by a franchisee of a chain might also get the chain in trouble. This isn't really very different.

That is incorrect again. The actions of the affiliate would be properly blamed on the affiliate, not on the larger chain -- unless there were significant evidence that the chain specifically encouraged that activity (not so in this case).
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The Anti-Mike, 23 Dec 2009 @ 7:33am

Re: Re: Re: Re: Re: Re: Re: Re:
Many lawsuits have been brought against Google for actions of its advertisers (a business relationship nearly identical to Amazon and its affiliates) and they have regularly been dismissed on Section 230 grounds.

Wrong business relationship (and you know it). Google and the advertiser are not in business together (ie, they don't profit from the same thing), Google sells a service (which makes them a service provider) and the advertiser buys it. They are on two seperate sides of the same transaction.

Amazon and their affiliates are on the same side of the transaction. Both profit when a sale is made, not when an ad is placed.

The actions of the affiliate would be properly blamed on the affiliate, not on the larger chain -- unless there were significant evidence that the chain specifically encouraged that activity (not so in this case).

Amazon encourages affiliates to market through ad words and other, not limiting traffic to only ads from websites that the affiliate owns. They are not ignorant of what their business partners are doing, they track every hit and the source of ever visit.

Again, Amazon is not a "service provider", they are in business with the affiliate to make money. A very different story.

Honestly. You claim that it had been used and won, and then you claim that no one would be stupid enough to use that as a defense.

You clearly have no interest in rational discussion. I caught you in a flat up lie, and you don't even seem to realize it. Rather than admit you are wrong, you simply change your story completely. Yikes.

No, you miss the point. The other side of the law is that affiliate programs often have responsibilities for what is going on (ask the guys who ran Zango). They are not just service providers, when they are on the same side of a business transaction.

What I asked you for was an example of a case where a 230 defence had been used and failed. It doesn't happen very often (I couldn't find any good examples) because few companies are stupid enough to use that as their only defense. I was hoping that a knowledgable guru like yourself might know of such a case, which would help to define the limits of 230. Without it, it is impossible for you to say without a doubt that "this company and that service are 230 protected", because you don't know where things stop.

Nice attempt to weasel out, as always, you don't appear to want to address the issues, just look for minor errors in my presentation. We aren't all professional writing gurus like yourself, Mike.
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Anonymous Coward, 23 Dec 2009 @ 8:20am

Re: Re: Re: Re: Re: Re: Re: Re: Re:
(c) Protection for “Good Samaritan” blocking and screening of offensive material
(1) Treatment of publisher or speaker
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

Troll somewhere else now, thanks.
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Mike Masnick (profile), 23 Dec 2009 @ 10:04am

Re: Re: Re: Re: Re: Re: Re: Re: Re:
Stunning. You still can't admit that you said, definitively:

"lawyers have also argued and won on the other side of the law as well."

You are amazing. You stated something definitively -- as you often do -- that was 100% wrong. And you still can't admit it. Instead, you keep spinning and spinning and spinning.
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Matt (profile), 23 Dec 2009 @ 12:03pm

Re: Re:
But all 230 says is that you are not the speaker or publisher of content. It does _not_ say that you cannot be held liable for that content on any theory.

Here, the theory is that the affiliates placed these ads as Amazon's agents. That may be a factually unsupported theory, but it isn't a stupid one. And there most certainly is a Lanham Act claim for false advertising if Amazon (directly or through an agent,) caused an ad to be published that said that a competitor was a scam artist (if the competitor was not, in fact, a scam artist).
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The Anti-Mike, 23 Dec 2009 @ 1:55pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Can you admit that you took my meaning incorrectly?

"the other side of the law" includes anything not related to 230 - you know, business arrangements. Plenty of companies operating on the internet aren't all service providers.

Oh and...

http://www.citmedialaw.org/blog/2009/barnes-v-yahoo-section-230-does-not-insulate-online-s ervice-provider-from-contractual-liab

Once again, Mike loses.
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Mike Masnick (profile), 23 Dec 2009 @ 2:25pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Can you admit that you took my meaning incorrectly?

I'm sorry, how could one take the meaning of "lawyers have also argued and won on the other side of the law as well" incorrectly. It's a declarative statement. And it's wrong. It hasn't happened.

Still waiting for that apology.

Once again, Mike loses.

Uh, did you even read the Barnes case? We wrote about it here. The only thing that happened there was that someone from Yahoo agreed to remove the content, creating an agreement to remove that specific content, and then went back on it and tried to hide under Section 230. That's an entirely different situation.

Once again, our biggest troll can't figure out the very basics of the law.

Again, we will await an apology.
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