Google's prohibits paid links that pass PageRank: "Buying or selling links that pass PageRank is in violation of Google's Webmaster Guidelines and can negatively impact a site's ranking in search results."
Google acknowledges that advertising links are a hugely important part of the online economy, but recommends that such links be structured in such a way that they don't pass PageRank, for example by using the "rel=nofollow" attribute.
The use of paid links can get a website in a lot of trouble, as JC Penney famously found out.
In part as a result of Google's policies, link buyers may want them to appear as normal editorially-awarded links. Links that look "natural" won't usually get websites in trouble, providing no-one reports the links to Google.
Internet marketers disagree on the question of whether such link buying is unethical. For some, link buying is a form of cheating that pollutes the search results; for others, it is an essential tool in an inherently unfair online marketplace, where the big brands get all the breaks. Whether or not link buying is unethical, it is usually agreed that it is legal.
As a matter of English law, this is wrong. Some paid links are illegal. In its clearest form, the problem relates specifically to links that:
- point at the websites of B2C businesses;
- appear to be editorially-awarded;
- recommend or endorse products or services; and
- are in fact bought.
The Consumer Protection from Unfair Trading Regulations 2008 expressly prohibit unfair commercial practices. There are various ways in which paid linking might fall within the scheme of the Regulations. Perhaps the best fit is with the concept of a "misleading action".
A misleading action is one form of unfair commercial practice; and one form of misleading action is described in Regulation 5(2):
A commercial practice satisfies the conditions of this paragraph - (a) if it contains false information and is therefore untruthful in relation to any of the matters in paragraph (4) or if it or its overall presentation in any way deceives or is likely to deceive the average consumer in relation to any of the matters in that paragraph, even if the information is factually correct; and (b) it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.
The matters listed in paragraph 4 include "the motives for the commercial practice" and "any statement or symbol relating to direct or indirect sponsorship or approval of the trader or the product".
Clearly, some paid links are untruthful with respect to their motives and/or endorsement. The more difficult question in many cases will be whether the links cause or are likely to cause the average consumer to buy (or "take a transactional decision").
Particular paid links may do that by their very nature (e.g. a paid-for product recommendation on a popular blog). An interesting question is whether the tendency of links to improve the ranking of a web page could itself bring them within part (b) of Regulation 5(2). Does the notional consumer who makes the purchase need to be the same notional consumer who sees the link?
Schedule 2 contains a list of specific commercial practice which are always considered unfair under the Regulations. Paragraph 11 of Schedule 2 refers to:
Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).
This description was obviously drafted with the traditional advertorial in mind, but it is I think clear that disguising paid links as editorially-awarded links will in some cases also be considered to be an unfair commercial practice under the Regulations.
A breach of the Regulations is punishable by a fine and/or up to two years in prison
Why, then, aren't paid linkers clogging up the English courts and prison system? I would guess the reason is that Trading Standards, who are primarily responsible for enforcing the Regulations, have bigger fish to fry - and not enough frying pans.