The state attorneys general-led antitrust lawsuit in opposition to Google over its promoting practices is sort of a image slowly coming into focus.
On Friday afternoon, an amended criticism filed final 12 months was unsealed in a New York district court docket revealing much more particulars about Mission Bernanke, a Google program to make use of data coming from writer advert servers to bolster Google’s personal ad-buying applied sciences.
The brand new submitting goes deeper on Google’s alleged plan to mislead advertisers and publishers in regards to the mechanisms of its advert public sale.
The additional $9 between the 2 bids, Google put right into a “pool” that it might use to secretly increase the bids by advertisers utilizing its instruments to make sure they’d all the time win out over advertisers utilizing non-Google instruments. pic.twitter.com/gE5O8Yvvbv
— Leah AntiTrustButVer1fy Nylen 🐧 (@leah_nylen) January 14, 2022
A closely redacted lawsuit, led by Texas AG Ken Paxton, was initially filed in December 2020, adopted by an amended model, additionally redacted, over the summer season.
In October, a judge in New York unsealed the suit, which revealed fairly just a few juicy particulars, together with Google’s AdX take fee (which is between double to quadruple its nearest opponents), Google’s penchant for purposely slowing the load occasions of non-AMP adverts and extra information on Jedi Blue, the key program to associate with Fb as a part of an effort to kill header bidding.
So, what was truly taking place?
As many publishers ruefully suspected for years, Google seems to have been partaking in a third-price public sale of kinds. From its advantaged place on each the demand aspect and the promote aspect, Google might see the entire bids coming in.
Demand-side platforms wouldn’t know whether or not they’d submitted the very best bid or not, and publishers wouldn’t know the vary of bids being made. Google Adverts (previously often called Google Show Community) would then pay publishers primarily based on the bottom bid and cost advertisers primarily based on the very best bid. Google would both pocket the distinction or apply the distinction to spice up the bid value to win a subsequent public sale. Google solely used this program (often called “International Bernanke”) when consumers purchased by way of Google’s SSP, AdX, the place it had full visibility into all of the bids and will use that data to tip the scales in its favor.
The upshot was this system artificially lowered bid density and artificially lowered clearing costs. Both method, publishers lose out.
The brand new criticism additionally claims that Google CEO Sundar Pichai and Fb (tremendous! Meta) CEO Mark Zuckerberg authorized the 2018 Jedi Blue pact whereby Fb agreed to not create its personal header bidding product in alternate for Google giving Fb data in addition to pace and different benefits in auctions.
The rise of header bidding round 2015 was an enormous menace to Google as a result of it gave rival exchanges the flexibility to compete with Google on a extra equal footing.
The beforehand unredacted swimsuit references an e-mail despatched by an unnamed Google government who wrote that header bidding had the potential to decrease Google’s revenue margins to round 5% from 20%, thereby threatening Google’s skill to justify its charges.
Google then allegedly hatched a plan to squash header bidding by putting partnerships and creating software program to guard its place, together with Open Bidding, which allowed publishers to route their stock to a number of exchanges on the identical time.
The aim of the general “Jedi” program, so named as a result of Google was enjoying a “Jedi thoughts trick” on the trade, was to get publishers to cease utilizing header bidding on their very own.
Fb is just not named as a defendant within the lawsuit in opposition to Google … though it has been named as a defendant in a number of different antitrust circumstances, together with one filed by the Federal Commerce Fee, which not too long ago obtained a judge’s blessing to maneuver ahead.
And on Friday, a coalition of state AGs filed an appeal arguing in opposition to a district court docket’s ruling over the summer season, dismissing its complementary Fb antitrust case. TBD on that one.
A Google spokesperson told Politico that the Texas-led criticism “continues to be filled with inaccuracies and lacks authorized benefit” and that Google’s “promoting applied sciences assist web sites and apps fund their content material and allow small companies to achieve prospects world wide.”
Get caught up
Google Misled Publishers and Advertisers, Unredacted Lawsuit Alleges (WSJ, Jan. 2022)
Dominance And Collusion: Inside The Unredacted Antitrust Lawsuit Against Google’s Ad Tech Business (AdExchanger, Oct. 2021)
What Pubs And Ad Tech Really Think Of Google’s ‘Project Bernanke’ (AdExchanger, April 2021)