If you allow advertising against a trademark keyword, except Google nobody will benefit (i.e. keyword auction).

@sameerparwani - its not about mentioning - its about snatching users/customers from that brand. Normal users tend to click on the first 4 links and if Flipkart is allowed to advertise on Infibeam books, then Infibeam should file a case against Flipkart to get a refund of money Flipkart made from users who came thru' the ad - this is what happened in Europe in a similar case.

After all, its not just a mention - its advertising in the pretext of another brand.

@Sameerparwani

Free speech is one aspect,  but in this Ad, do you see anything like free speech ?

If any report comparing flipkart vs infibeam and FK is telling they are better than other, it is free speech, Putting Ads like these are NOT free speech in any way,

What is your thoughts ? Is this Ad related to Free speech ?

@raxitshet, this ad is not a good example because it's a template ad (dynamic ad). But if the user had searched for "buy books on infibeam" and instead got an ad for "India's Biggest Online Bookstore - Flipkart" I think that is totally reasonable.

@sameerparwani 

1. Showing competing Ad is fine
2. Using Competitors name,trademark to mis-lead user is not fine.

In this case, it is 2.  While in yatra, fligh search it is case 1.


Raxit

@sinha, it's up to Infibeam to inform Google they want to block others from using their brand name in ad copy. What Flipkart is doing is not illegal, but Google will prevent it if Infibeam protests. Google does not want to be considered party to trademark infringement (which may or may not be occurring depending on the particular country and specifically on how the text is being used and what the landing page contains).

@raxitsheth, it's hard to answer your question because the ad as currently worded is indeed confusing. But not in a way that is confusing that favors Flipkart. So, if Flipkart was intentionally being confusing to aid itself, I'd agree that is unethical and illegal. But if Flipkart fixed their ad to make it clear they are a competitor, I'd have no problem with that ad. In that case, Inifbeam might suffer but that's because Flipkart is being a better marketer not due to illegal tactics

@sinha, there's been tons of lawsuits over the issue in many different countries. In most developed countries, the judiciary has already given clarity on the issue. The general decision has been keyword bidding is okay but trademark use in ad copy is sometimes legal and sometimes illegal depending on its use. Of course that varies by country but this is the most common outcome around the world so far

@AnkurrS, what is wrong with that? Why are Indians always for regulations, censorship, restrictions, etc. 

Morality of doing business seems just dead from the World.....

A lot has already been covered, so little to add here. But, if you speak with a digital marketing person, this happens all over the world and common practice. If you drill deeper, the branded (your brand and competitor) campaigns typically outperform other campaigns so there is a lot of incentive to do so.

@sameerparwani - It is not really about restrictions or regulations etc. Infibeam irrespective of their current size VS Flipkart have spent their own time and money in building up a brand. This to me is a preemptive strike by Flipkart and as @sinha mentioned it is the start of bad DNA in the organization.

illegal or not, as a consumer of search services (albeit, non cash paying type) i feel cheated by this kind of advertising.
In the early days, Google search used to show Ads on the right side of the screen so you could focus on the actual search results. Now you are forced to look at them as they are on the top and you need to scroll down through them to see where the actual search results start.

As an (e)Xoogler, I can say that this is wrong. I think definitely infibeam wouldn't have allowed Flipkart to use their brandname for advertising as they are competitors. According to Google's adwords policy this is a violation. An online shoe vendor might advertise using brand names such as nike, adidas etc. But he can't use the competitor ecommerce player's name as a keyword. Hope I am clear.

Also check out this picture guys.
Its really sad to see big players doing this.

Sorry for being late to the party(almost a month since last comment) but I just found this forum...

Basically as mentioned above Google doesn't allow this as policy, but lets it slip by not building stronger algorithms to catch violations in Adwords. I believe this policy is put in place to cover Google's behind because another way of looking at this is that Google is forcing me to buy ad space by selling it to my competitors sort of a defensive buy kind of a scenario which is good argument for me to sue Google.

But then nobody can stop your competitor from buying the billboard outside your shop, but then again suing Google is easier and lucrative than suing the billboard owner.

Another point to be noted is that flipkarts adwords is on auto pilot since over a year because some of them ads are still configured based on their old website's URL structure which does this to them ads now http://www.gounder.co.in/blog/20111108/does-flipkart-verify-the-ads-run-by-their-agency/

So they aren't thinking ethically or non ethical they are busy trying to make TVCs I guess!