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I can't really go into the whys at the moment but there would be nothing illegal going on and nothing that would cause a civil liability.
[...] He wouldn't approve if he did see but there is no way for him to know who was doing it. Google won't tell who owns a particular ad account. [...]
I haven't read the AdWords Terms and Conditions in depth recently, so I am not sure what they say on this subject. But it would be a good idea for you to read them, I'd think.
As a support person, I have tackled this question from the unhappy recipients of this sort of unwanted advertising attention a few times over the years - and in my opinion, it is a true waste of the 'target's' time, as well as a waste of the time of the support person who has to deal with it.
Bottom line, I doubt you will win any friends by doing this, and I would ask politely that you just don't do it.
I called AdWords about ten minutes ago and gave them the information. They've opened a case and we'll see what happens from here.
So I've clarified (I hope) and I will see what they reply with. If advertisers are allowed to do this people can really do some horrible things to competitors.
I, as an affiliate, had a case when a guy was doing something totally dishonest with my own site. It's very sneaky tactics that applies to affiliate world only.
Anyhow, I called, and an ad was brought down. I as a site owner asked for that.
If you are in the same position (regardless of affiliate matter), and especially if you can explain to support how the other entity is harming your business, they should definitely respond positively for you.
I just wish there is more of punishment going toward such people - those that are misusing other people's ads and web sites.
It's just awful what I have experienced out there in AdWords so far. The worst online dirt, deliberate 100%, coming from guys that would sell their mother. If they do just 25% of that on the street, they would appear in front of a judge with no doubt.
I'm really disappointed in AdWords. It seems as though I have a choice of taking the moral high road and losing money or playing tit for tat and causing equal damage to our competitors.
What about trademarking your domain? I believe the display url in the ad can't differ from the destination url domain, so if you were to trademark your domain, you might be able to get anything removed that references that domain?
I like the idea of trademarking domain names. I had not thought to do that before.