European Union: ECJ Rules On Application Of Misleading And Comparative Advertising Directive To Registration And Use Of Domain Names And Use Of Metatags

On 11 July 2013, the Court of Justice of the European Union (the "ECJ") held that the term "advertising", as defined in Article 2(1) of now repealed Council Directive 84/450/EEC of 10 September 1984 concerning misleading and comparative advertising ("Directive 84/450/EEC") and in Article 2(a) of current Directive 2006/114/EC of 12 December 2006 concerning misleading and comparative advertising ("Directive 2006/114/EC"), may include the use of (i) a domain name; and (ii) metatags in a website's metadata. By contrast, the ECJ considered that the registration of a domain name, as such, is not encompassed by the term "advertising" (ECJ, case C-657/11, Belgian Electronic Sorting Technology NV v. Bert Peelaers and Visys NV).

Article 2(1) of Directive 84/450/EEC and Article 2(a) of Directive 2006/114/EC both define the term "advertising" as "the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations".

The ECJ delivered its judgment in response to a reference for a preliminary ruling from the Belgian Supreme Court (the "Court"). The Court had made the reference in proceedings between Belgian Electronic Sorting Technology NV, also known as "BEST NV" ("BEST"), and Mr Peelaers and Visys NV ("Visys"). Mr Peelaers was one of the founding members of Visys. At issue were the (i) registration and use by Visys of the domain name www.bestlasersorter.com; and (ii) use by Visys of keyword metatags referring to BEST and to that company's products. Keyword metatags are terms which are read by search engines when they scan the internet to carry out referencing of the many available websites and constitute one of the factors enabling search engines to rank websites according to their relevance to the search term entered by the internet user.

As it was not disputed that Visys had acted in the context of its commercial activity, the ECJ noted that the only open question was whether the acts of Visys could be regarded as a "form of representation" which was made "in order to promote the supply of goods or services", within the meaning of Article 2(1) of Directive 84/450/EEC and Article 2(a) of Directive 2006/114/EC.

With regard, first, to the registration of a domain name, the ECJ answered this question negatively. It considered that the registration of a domain name is nothing other than a purely formal act by which the body designated to manage domain names is asked to enter, in exchange for payment, that domain name into its database and link internet users who type in that domain name only to the IP address specified by the domain name holder. This purely formal act, in itself, does not imply that potential consumers can become aware of the domain name since the mere registration of a domain name does not automatically mean that it will actually be used to create a website. Accordingly, the ECJ held that the registration of a domain name is not capable of influencing the choice of potential users and cannot be considered to constitute a representation made in order to promote the supply of goods or services of the domain name holder.

Second, as regards the use of a domain name, the ECJ answered the question in the affirmative, holding that Visys' use of the domain name www.bestlasersorter.com to host a website the content of which was identical to its existing websites was clearly intended to promote the supply of its goods or services. The ECJ pointed out that it is not only by means of a website hosted under the domain name that a domain name holder seeks to promote its products or services, but also by using a carefully chosen domain name, intended to encourage the greatest possible number of internet users to visit that site and take an interest in its offer. It continued that the use of a domain name which makes reference to certain goods or services or to the trade name of a company constitutes a form of representation that is made to potential purchasers and suggests to them that they will find, under that name, a website relating to those goods or services, or relating to that company.

Finally, with regard to the use of metatags in a website's metadata, the ECJ answered in the affirmative as well. It held that the use of metatags corresponding to the names of a competitor's goods and its trade name in the programming code of a website must be considered as a "form of representation" within the meaning of Article 2(1) of Directive 84/450/EEC and Article 2(a) of Directive 2006/114/EC in so far as such use suggests to the internet user who enters one of those names as a search term that that website is related to his search. In this regard, the ECJ considered it irrelevant that metatags are (i) invisible to the internet user; and (ii) not addressed to the internet user but to the search engine. The ECJ continued that there can also be no doubt that such use of metatags is a promotion strategy in that it aims to cause the internet user to visit the site of the metatag user and to take an interest in its goods or services.

While the ECJ's ruling is unsurprising, it will be interesting to see whether the Belgian courts will find Visys' practices to be in breach of the misleading advertising rules.

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