Google faces legal action over competitive bidding plan and Auto Trader are among the companies considering legal action against Google, over its plans to allow firms to bid for the brand names of rivals in search results, according to a report by Channel 4 News.

Google plans to introduce changes in the UK, which it has already launched in the US, allowing companies to advertise under the key ad words of their rivals.

Under the current system, if a trademarked name such as Tesco is searched for, results are delivered about that company at the top.

However, under the new system, rival firms could bid for the Tesco name and a search will deliver a whole list of ads for rivals.

Likewise for companies like, a search under the new system could deliver results for rival travel firms.

Ian McCaig, chief executive of, told Channel 4 News that Google's proposals will cost it millions and could breach trademark law. He said that if the search giant goes ahead with its plans, Lastminute is prepared to launch legal action.

McCaig said: "We believe that Google's policy change is a big problem and we object to it.

"We are investigating with vigour the legal position and if that investigation concludes positively then we will absolutely pursue a legal case, no question."

Channel 4 News says that a number of other firms are considering legal action, including the Guardian Media Group/Apax owned Auto Trader. Tesco is another that is unhappy with the change, but says it is adopting a "wait and see approach" before deciding on pressing ahead with legal action.

In a statement, it said it was "disappointed at Google's recent changes to their Trademark Policy as we think that consumers are the people who will be disadvantaged".

In response Google has dismissed complaints and it said was making the changes to improve its service to users.

Matt Brittin, Google's UK head, told Channel 4 News: "We are absolutely making this change because we believe it improves our service to users… if we do things that are right for users then we would expect to make some money out of it, but it is not something we are doing because we believe people will have to pay more for their trademark terms, absolutely not."

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