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The result can be split two ways. Either the advertiser wasted money on a click because the consumer will seek out the true XYZ. Or the consumer will be satisfied with what they've clicked and choose to buy it.

Hopefully the metrics show that the latter is mostly happening.

It's only fraud if the advertiser counterfeits XYZ's brand on their website.

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I'm worried about trademark law, not fraud per se, and consumer confusion is the gold standard.

The ad can violate trademarks even if the site behind the ad is squeaky-clean.

Trademark law does not stop you saying "my product is better than X". It only stops you saying "my product is X".

Generally, yes. But if a large fraction of people are getting confused in a specific context, then you can say "don't word it that way", even if the wording is true when you consider it in a vacuum.

If putting the other brand name first causes consumer confusion in certain places, that's a problem, even if they're not lying or even doing it on purpose.

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