Russia’s Federal Antimonopoly Service (FAS Russia) has opened an investigation into Google over suspected infringements of the national Advertising Law, the competition authority said today.
The antimonopoly body has detected a violation of the investment advertising rules by Google AdWords service. Specifically, the regulator says that when typing in the Google search engine the keyword “profitable investment,” the service displays a promotional ad for the investment products of an unregulated brand called “ALI TRADE.”
“Advertising of an organization that does not have a corresponding license for the proposed service cannot be recognized as legal. The identification of such violations is especially important in view of the fact that advertising forms the attitude of consumers not only to a specific company, but to the entire industry as a whole,” said FAS chairman Andrei Kashevarov.
The investigation followed a formal complaint by the Russian Federal Public-State Foundation for the Protection of Investors and Shareholders’ Rights, which accused Google’s internet ad services business of promoting unauthorized investment products.
The statutory inquiry will probe whether Google, as the advertising distributor, violated general protection regulations and broke mandatory safeguards prescribed by the Federal Act on Investment Fund.
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Violation of advertising legislation is subject to a fine for legal entities in the amount from 100,000 to 500,000 rubles, the watchdog said in a statement on Friday.
ALI TRADE operate an HYIP scheme
The announcement came almost exactly eight months after Russia adopted the sweeping rules to regulate the forex market, which effectively killed the local retail industry and put the business into the hands of major banks.
The FAS has previously launched a probe into the ads of online FX brokerage InstaForex, which was among five foreign exchange dealers operating in the country that saw their licenses revoked last year. The official reasons behind the move were that the Kaliningrad-based brokerage had been using aggressive advertising to lure Russian clients, while falsely advertising that its services are licensed by the Central Bank of Russia.
A brief look at ALI TRADE website shows that it claims to offer multiple investment plans, with daily returns ranging from 0.10 percent to 3.0 percent, which raises a red flag as far as investors are concerned.
As one would expect, sites such as ALI TRADE operate as an HYIP scheme where returns are always dodgy, though they tend to dry up well before the original investment amount is repaid. The company provides no legitimate proof of payouts, and it is likely that no one will ever see any money.