EU Committee Slams Google’s Advertising Practices

While some of Google’s online advertising practices are becoming less controversial in the U.S. as they get more entrenched, they’re still raising hackles in Europe.

A Committee of the European Parliament has voted to approve a report [PDF] that condemns some common online advertising practices, such as selling ads against search “keywords” that are also trademarks, and creating ads by scanning e-mails. While the report doesn’t mention Google-or any other company-by name, both practices are important features of Google’s advertising system.

The approval of the report’s recommendations, by a 30-1 vote, suggests that wide gap persists between U.S. and European views on what kind of data advertisers should be able to use in crafting targeted ads.

Google’s practice of selling advertising based on search keywords that are also trademarks has been challenged in numerous lawsuits, but the company has never lost a case in a U.S. court. It also won a key European court case over trademarked keywords in March. Since then, Google (NSDQ: GOOG) has expanded its policy of selling ads against trademarked keywords in Europe.

The 13-page report, which was approved by the Parliament’s Committee on the Internal Market and Consumer Protection on Nov. 8, pushes back against that decision, stating that “the sale by search engines of registered brand names as advertising keywords” should be “subject to prior authorization” by the brand owners in question.

Separately, the report also says that “the content of private e-mails” shouldn’t be used “for advertising purposes.” That would hobble the advertising system that supports Gmail, since Google uses automated scans of the contents of e-mails to power its Gmail ad system. The data collected while providing a service like e-mail must be “kept wholly separate from those [data] collected in the course of advertising activities,” the report suggests.

The proposals will be debated by the full European Parliament in December.

If European legislators take a position towards Google’s advertising practices as tough as the one adopted by this committee, the company’s series of court wins-which provide a strong legal basis for the profitable practice of auctioning off trademarked keywords-could be put into jeopardy.

The report [PDF] also suggests:

»  Distinguishing advertising cookies from other cookies

»  Introducing a voluntary EU label for websites that comply with EU data protection legislation

»  Prohibiting the indiscriminate sending of unsolicited advertising to mobile phones without prior consent

»  Inserting the words ‘behavioral advertisement’ into the relevant online advertisements, along with a brief explanation