The last two times the Utah legislature attempted to regulate keyword advertising didn’t turn out very well. It’s probably a surprise to many then (maybe not though) that the governmental body is giving it a third try, this time with a version as watered down as it is vague.
Eric Goldman
Once again it appears that 1-800-Contacts’ fingerprints are all over this proposed legislation as the company tries to prevent competitors from using its trademark in keyword advertising. Though less disturbingly sweeping than previous iterations, which got a lot of attention, especially from Google, Eric Goldman at Technology and Marketing Law Blog is having trouble identifying how it differs from policies major search engines like Google and Yahoo already have in place.
“…it also makes me wonder–what’s the point? Doesn’t Utah have more important problems to solve???
“Even if the law is less troublesome than the last two, let’s be clear: this is not a good proposal. As with Utah’s past two efforts, this law has nothing to do with improving consumer welfare. Instead, it would allow companies to suppress competition by helping companies keep their competitors from gaining exposure among the company’s potential customers; meaning that companies won’t have to work as hard competing on price and quality.”
In addition, the legislation is vague enough that it might apply even to telephone directory assistance advertisers. Unlike previous versions, the law only applies to those doing business in Utah and to services with geographically targeted services. But as Goldman points out, what those services are and to whom they would apply are unclear.
With so many states passing Internet legislation to suit themselves, it brings up another issue: If the internet is an interstate commerce phenomenon, shouldn’t it be regulated only at the federal level? Recently we’ve seen New York impose taxes and back taxes, Kentucky seize international gambling domains, Washington aggressively prosecuting for actions legal in other states, California wanting to ban Internet hunting, and on and on it goes 50-fold, which makes Internet interstate business pretty burdensome.
