In Case C-657/11 Belgian Electronic Sorting Technology NV v Bert Peelayers and Visys NV, the CJEU has ruled that the use of domain names and the use of metatags, but not the mere registration of a domain name, constitute "advertising" under the terms of the Misleading and Comparative Advertising Directive (Directive 2006/114/EC).

Under the Directive, ‘advertising’ means "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".

By way of context, the claimant, BEST NV, was an established manufacturer and distributor of sorting systems and the defendant was a later entrant to the market who had registered the domain The site was one of several operated by the defendant, and contained content identical to its other sites. BEST was an acronym for the claimant's full name, and the defendant's website also used metatags that were based on the names of the claimant's products.

In reaching this decision, the CJEU noted that the "particularly broad definition" of the term "advertising" within the Directive means that the forms which advertising may take are very varied. Having regard to the purpose of the Directive, the term "advertising" "cannot be interpreted and applied in such a way that steps taken by a trader to promote the sale of his products or services that are capable of influencing the economic behaviour of consumers and, therefore, of affecting the competitors of that trade, are not subject to the rules of fair competition" imposed by the Directive.

Dealing first with the registration of a domain name, the CJEU found that this is nothing more than a formal act by which the domain name registrar is asked to enter the name into a database and link internet users who type in that domain name to an IP address specified by the domain name holder. The mere registration of a domain name does not automatically mean that it will be used to create a website and that, consequently, it will be possible for Internet users to become aware of the domain name. The Court acknowledged that the registration of a domain name has the consequence of depriving competitors of the opportunity to register and use that domain name for their own sites, but held that this constitutes at most a restriction on the communication opportunities of that competitor: the mere registration of the domain does not in itself contain any advertising representation.

By contrast, the Court considered that the use of the domain name  was clearly intended to promote the goods and services of the defendant because the content of the website was identical to the defendant's other websites. The domain name was carefully chosen and intended to encourage the greatest number of Internet users to visit that site and take interest in the offer. The use of the trade name of a company within a domain name constitutes a form of representation that is made to potential consumers, suggesting to them that they will find a website relating to that company.

Turning to the use of metatags, the Court noted that these are read by search engines and constitute one of the factors enabling search engines to rank sites according to their relevance to a search term entered by an Internet user. Use of metatags referring to the names of a competitor's goods and its trade name will, in general, have the effect that the results displayed by search engines will be changed to the advantage of the user of those metatags. Insofar as this suggests to the user of a search engine who enters these search terms that the site containing this metadata is related to his search, such use must be considered as a form of representation within the meaning of the Directive. It is irrelevant that the metatags are invisible to the Internet user, or that they are addressed to the search engine rather than the user. The concept of advertising includes indirect forms of representation, particularly where they are capable of influencing the economic behaviour of consumers.

It is now for the national court to decide whether the defendant's activities were in breach of the national implementation of the Directive.

The full judgment can be found here.