Unfair competition in digital advertising: what can your company do (and not do) on social media?

On social media, the line between aggressive marketing and an unfair-competition violation is thinner than it looks — and it is crossed every day by companies that don't know they have committed a crime. Buying the competitor's brand on Google Ads “because everyone does it”, answering a comparison with sarcasm about the rival's product, asking employees for 5-star reviews: each of these practices has already led to convictions. And the reverse matters too: your company may be suffering this right now, losing clicks and customers to someone playing dirty.

Unfair competition is the use of fraudulent means to divert someone else's customers for one's own benefit — conduct defined as a crime in art. 195, III, of Law 9,279/1996 (the Industrial Property Law), punishable by 3 months to 1 year of detention or a fine, without prejudice to civil damages (art. 209). In this article, we will show where digital advertising crosses that line, what the courts say about ads using another company's trademark, the rules for comparative and influencer advertising, and how to react when the one under attack is your business.

Is using a competitor's trademark in ads and keywords allowed?

No, when it diverts customers or causes confusion. The STJ — Brazil's Superior Court of Justice — has recognized that buying a competitor's trademark as a sponsored-link keyword can amount to unfair competition: the consumer searches for company X and is captured by company Y's ad, which profits from someone else's reputation. The same goes for using the competitor's name in hashtags, look-alike handles and product descriptions (“similar to [brand]”) with the potential to confuse. The structural contrast: the law allows you to compete for the customer on your own merit; it prohibits capturing them by using another's distinctive sign as bait. Injured companies have obtained injunctions to stop the ads and damages for the period of improper capture.

Comparative advertising: how far can I go?

The comparison itself is not prohibited in Brazil — it is accepted when objective, truthful and verifiable, which is how CONAR (Brazil's advertising self-regulation body) treats it (art. 32 of the Brazilian Advertising Self-Regulation Code). It crosses the line when it: disparages the competitor or its product (art. 195, I and II, of the LPI), uses false or unverifiable data, compares non-equivalent items to mislead, or exploits the other company's trademark beyond what is strictly necessary for the comparison. A practical rule for the marketing team: every published comparative claim must have documentary proof filed before the post — a technical report, a survey, an official table. No prior proof, no publishing.

Influencers, reviews and profiles: where does the risk live?

Three fronts concentrate the sanctions and lawsuits:

1. Disguised influencer advertising: a paid post without a clear disclosure (“publi”, “publicidade”) violates the principle that advertising must be identifiable (art. 36 of the CDC) and CONAR's guidelines — and liability reaches the advertising brand, not just the influencer;
2. Fake reviews: fabricated reviews — positive for yourself or negative against the rival — amount to a deceptive practice and a fraudulent means of diverting customers, with civil liability;
3. Copycat profiles and pages: accounts whose name, visual identity or bio imitate the competitor to capture followers or sales. Document with a notarized record before sending any notice: digital content disappears fast, and pre-constituted evidence is worth the entire case.

My company was attacked: what is the response plan?

The sequence that preserves rights and speeds up results: 1) preserve the evidence — screenshots with URL and date and, in significant cases, a notarized record of the content; 2) extrajudicial notice to the infringer and reports to the platforms (Google, Meta) through their trademark-violation channels; 3) a complaint to CONAR, when an advertising piece is involved; 4) a lawsuit seeking urgent relief for removal and a cease order, combined with damages for material losses (diverted customers) and reputational harm to the company — and, in serious cases, the criminal route under art. 195 of the LPI. Every week an infringing ad stays live is your customer base funding the unfair competitor; the speed of the response is part of the damage avoided.

A concrete example: Tech Move Ltda. versus the bait ad

Tech Move Ltda., a São Paulo accessories e-commerce, saw the cost per click on its own brand triple: a competitor was buying “tech move” on Google Ads and advertising “Tech Move? Meet someone who delivers cheaper”. Within 45 days: a notarized record of the ads, a formal notice, a report to the platform and a lawsuit with an injunction — the ads came down and, in the end, a settlement paid R$ 85 thousand in damages, calculated on the traffic diverted over the quarter. The “clever” competitor ended up paying for the victim's campaign.

The most common (and costly) mistakes

1. “Everyone buys the competitor's brand on Ads.” Risk: an injunction, damages and even criminal prosecution (art. 195 of the LPI).
2. Comparing without proof on file. Risk: the burden of proving the claim is yours — and the ad becomes a confession of misleading advertising.
3. Paying an influencer without requiring the “publi” disclosure. Risk: sanctions and reputational damage answered by the brand, not the creator.
4. Reacting to an attack by wiping the board before securing proof. Risk: notifying before documenting is warning the infringer to destroy the evidence.

Actionable digital advertising compliance checklist

• A written keyword policy: no third-party trademark as a keyword or in creatives;
• A prior evidence file for every comparative piece (reports, surveys, dates);
• Influencer contracts requiring advertising disclosure and truthfulness;
• An internal ban on fabricated reviews — and monitoring of the ones received;
• A quarterly routine of searching for your brand in ads, profiles and marketplaces + a response protocol (evidence → notice → platform → courts).

Frequently asked questions

Is using a competitor's name in Google Ads a crime?

It can amount to unfair competition — a crime under art. 195, III, of Law 9,279/1996, punishable by 3 months to 1 year of detention or a fine — and it also creates a duty to pay damages (art. 209). The STJ has recognized the violation in the use of another company's trademark as a sponsored-link keyword when it diverts customers or confuses consumers.

Is comparative advertising allowed in Brazil?

Yes, as long as it is objective, truthful and verifiable — the standard accepted by CONAR (art. 32 of the Self-Regulation Code) and compatible with the LPI. It becomes unlawful when it disparages the competitor, uses false data, compares non-equivalent products to mislead, or improperly exploits another company's trademark. The proof behind every claim must exist before publication.

What should I do if a competitor is using my trademark in ads?

In this order: preserve the evidence (dated screenshots and, where relevant, a notarized record), send an extrajudicial notice, report to the platforms through their trademark-violation forms and, if it continues, file a lawsuit seeking an injunction to remove the ads and damages for the diverted customers. With the trademark registered at the INPI (Brazil's trademark office), the protection is stronger — check your registration status.

Does an influencer post have to disclose that it is advertising?

Yes. Advertising must be immediately identifiable as such (art. 36 of the CDC), and CONAR's guidelines require clear labeling — “publicidade”, “publi” — on paid posts or posts featuring gifted products. Omitting it amounts to disguised advertising and also makes the advertising brand liable, through CONAR and Procon sanctions and damages claims.

When should I see a competition lawyer in São Paulo?

At two moments: preventively, to structure your digital advertising compliance (keywords, comparative ads, influencer contracts) before a campaign turns into a lawsuit; and reactively, at the first sign of third parties using your trademark — when immediately preserving evidence and obtaining an injunction determine how much of the diverted customer base you recover.

Online, an unfair advantage is traceable — for both sides

Everything published leaves a record: the bait ad, the comparison without proof, the post without “publi”. That makes the infringer easier to convict and the victim easier to defend than ever. Companies that structure their advertising compliance compete safely; those that react quickly to attacks turn screenshots into damages.

At Falchet e Marques Sociedade de Advogados, a law firm in São Paulo (Av. Paulista), we work in competition law and digital advertising: campaign compliance, formal notices and court measures against trademark misuse, bait ads and unfair advertising — protecting the customer base your company has built.

Talk to our team on WhatsApp: +55 11 95901-1854 — tell us what the competitor is doing (or send the screenshots) and receive an assessment of the measures available.