Competitor Conquesting
Competitor conquesting is bidding on a competitor's brand name as a Google Ads keyword so your ad shows when people search for them. It is legal and permitted by Google's policy in most markets, Google restricts trademarks only in ad text, not in keyword targeting. Using the competitor's trademark in your ad copy is a separate question, usually disallowed if they've filed a trademark complaint.
In depth
Two separate rules: targeting the brand keyword (almost always allowed) vs. naming the brand in ad text (usually disallowed once the owner files a Google trademark complaint).
US case law (Rosetta Stone, the 1-800 Contacts FTC action) holds that a trademark used purely as a keyword trigger is not infringement, confusion is judged on what the ad says, not the invisible keyword.
Your Quality Score on a competitor's brand term is structurally low (your landing page isn't relevant to their brand), so conquest CPCs run high. It pays off only with a strong differentiator and a high-value conversion.
Defense: run your own brand-defense campaign (near-perfect Quality Score, cheap top slot) and file a Google trademark complaint to block competitors naming you in their copy.
Common misconception
Bidding on a competitor's brand name will NOT get your account penalized, there's no penalty for it, and it doesn't affect your Quality Score on your own keywords. The only enforcement is ad disapproval if you use their trademark in ad text where a complaint is on file.
Source: Google Ads Help: Trademark policy
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