Can anyone see this working in anyone's favour other than google's wallet's?
Also, as far as i am concerned this totally contradicts and undermines trademark legislation. How do they get away with this? Will anyone ever challenge them?
It's not quite a free-for-all on trademarks now. As I understand it, you will now be able to bid on keywords that are trademarks, but not include trademarks in the adverts that are displayed.
I don't see anything wrong with this. It should lead to more choice and competition, while the only advert showing the brand name will still belong to its rightful owner.
It was previously quite a long process to get approval to use trademarks where you were legitimately entitled to do so. For example, a client of mine wished to advertise a brand for which they were the franchise holders, and until recently, could not. Now, they can.
Some trademark control is important, but it was too restrictive before.