When choosing a domain name is important to pick something that will be instantly recognised by the customer. To achieve this, businesses will commonly base their domain name on their brand name or trademark. This makes it easier for customers to find the webpage and drives traffic to that webpage up. It is also common for rogue traders to incorporate the brand name of an existing business into their own domain name in order to deceive customers into visiting their site in the mistaken belief that there is a link. This activity is known as cyber-squatting.
Traditional methods of challenging cyber-squatting include trademark infringement or passing off. The disadvantage to these methods is that they require a Court which means that the costs involved are likely to be high.
The Advertising Standards Authority (ASA) is a cheaper alternative to these traditional methods of enforcement but is it effective?
The ASA has the ability to adjudicate on advertisements in the broadcast and non-broadcast media. It bases its decision on industry written codes. Internet advertising falls under the CAP Code. One of the main grounds of complaint in the code is that an advertisement is misleading or likely to be misleading. In particular the advertisement must not omit material information or present information in an unclear way. Whether an advertisement is misleading is judged on the particular circumstances of the case but relevant considerations are the context and medium. The code also provides that the advertisement must not display a trust mark, quality mark or equivalent without authorisation. The advertisement cannot show that a public or other body has endorsed or authorised the product where such endorsement does not exist.
The recent adjudication by the ASA on the advertisement by Esta Visa Ltd shows the ASA applying these rules to cyber-squatting.
Esta Visa’s use of the URL www.nhs-services.org.uk, which directed the user to a website containing an advertisement for a ‘free’ EHIC card, was objected to by the NHS as misleading. The website did make it clear in large text that it was not affiliated with the NHS in any way but the ASA upheld the complaint. The use of ‘nhs-services’ in the URL was misleading and the inclusion of the term ‘nhs’ would lead consumer to conclude that the advertiser was the NHS. Such association would increase the trustworthiness of the site and encourage users to purchase the item.
This decision is surely correct. The use of another organisation’s brand name in a domain name is likely to mislead a consumer into thinking there is a link. Esta Visa’s use of ‘nhs’ in the domain name was firstly, to deceive those searching for the NHS into visiting the website and secondly, to create a link in the mind of the user with a trusted provider of health services.
The consequences of cyber-squatting for the reputation of a brand can be severe. The problem is that this practice is widespread and extends beyond the jurisdiction of the ASA. The ASA can only adjudicate on domain names that link to advertisements, like the one here. Many examples of cyber-squatting fall outwith the ASA’s restricted remit.
It is also interesting to note that this is not the first time that Esta Visa’s practice has been criticised by the ASA. Esta Visa had previously been using nhs-direct as their domain name. In that case the ASA told the advertiser to change the advertisement. There was no financial penalty imposed. Without the risk of a financial penalty it is unlikely that those engaging in cyber-squatting will fear the ASA ruling against them. The deterrent effect of this decision is substantially reduced as a result.