New law hurts competition

Despite warnings that a bill to curb keyword-triggered advertising on Internet search engines was likely unconstitutional and could trigger a lawsuit, state lawmakers unanimously approved SB236 during the 2007 Legislature. Gov. Jon Huntsman Jr. has since signed it into law.

Now the world's largest Internet search engine is crying foul. The new law, titled the Trademark Protection Act, hurts consumers, violates free speech and is inconsistent with U.S. trademark law and capitalism, a Google spokesman is quoted as saying in press reports.

Effectively, the bill aims to rein in a practice in North America in which Google and other Web sites charge competing businesses to make their advertising appear when people search for the rival company or product. Utah's law would enable companies to register their trademarks to protect them from competitors who seek to buy the right to key off of those brands. Companies with registered trademarks could sue search engines and competitors if such ads turn up in Utah-based Internet searches.

Rep. Dave Clark, R-Santa Clara, who co-sponsored the legislation, told The Associated Press that the practice is tantamount to a business rival meeting a customer at the front door of a business and whisking him away to the other store.

But, isn't that the point of advertising? Isn't this really a matter of clever ad placement? Isn't it a matter of one company playing the game better than another? Doesn't it benefit consumers to have more choices?

Could it be that Americans are still adjusting to a different form of advertising? How is capitalizing on a keyword that much different than a department store placing its shoe advertisement on an opposing page from another department store's shoe ad? There are a handful of television commercials for competing automobile dealers during nearly every nightly news broadcast.

The Internet creates a brave new world of commerce. Government's primary focus needs to be protecting consumers. Businesses — and the market — can figure out the advertising dynamics on their own.