The U.S. Department of Justice and several state attorneys have filed a significant antitrust lawsuit against Google, accusing the company of monopolizing the digital advertising market. The lawsuit claims that Google used acquisitions and anti-competitive practices to dominate ad tech, control ad auctions, and inflate advertising prices. Attorney General Merrick Garland emphasized that Google’s actions harmed competition and increased ad costs for publishers and advertisers, including government entities like the U.S. military. The case seeks to restore fair competition in digital advertising markets. DOJ and Yahoo News.
On the fourth day of the Department of Justice’s antitrust trial against Google, it was alleged that the tech giant intentionally altered its advertising product rules to consolidate control in the ad tech market. This change, called Unified Pricing Rules (UPR), was introduced despite knowing it would upset online publishers who sell ad space. Evidence presented by the DOJ, including testimony from a former Google executive, internal emails, and a recording of a 2019 meeting, painted a picture of Google disregarding the interests of its publisher customers to fortify its own market position.
Buried DOJ Evidence Reveals How Google Dealt With The Trade Desk https://t.co/ptGjvayqgR
— Gabe Elliott (@GabeElliott) September 13, 2024
According to the DOJ, Google’s actions demonstrated its dominance in the advertising technology sector. The government argued that publishers had little choice but to comply with the changes because Google faced limited competition, which gave the company undue leverage in setting the terms of ad sales.
The UPR change eliminated publishers’ ability to set different floor prices for various ad exchanges when selling ad space, a practice they previously used to reduce their reliance on Google. Publishers often set higher prices for Google’s AdX exchange as part of a strategy to push for better terms and diversify their ad revenue sources. Internal company emails revealed Google executives were aware of this tactic and understood why publishers implemented it.
Despite publishers expressing concern, Google rolled out UPR in 2019, forcing them to apply the same price floor for all exchanges. Stephanie Layser, who worked in programmatic advertising at News Corp at the time, testified that she believed UPR was designed to benefit Google, not its customers. At a contentious meeting in April 2019, several publishers voiced their frustrations, with some describing the move as taking away critical control over their ad pricing.
The DOJ’s antitrust case against Google is making waves, highlighting the company’s dominance across ad tech. With 87% of the US ad market under its control, this trial could change the future of digital advertising. https://t.co/mmAKx8tqY8
— Terri Edmonds (@Terri__Edmonds) September 13, 2024
Google executives were reportedly aware of the potential backlash. They discussed internally how difficult it would be to communicate the changes, with one executive noting that convincing publishers of the shift to AdX would be “tricky.” Despite this, the company proceeded with the rollout, citing the benefits of transparency and fairness in the ad auction process.
During the trial, Google’s attorneys defended the company’s decision, arguing that the changes, including the shift from second-price to first-price auctions, were in the interest of improving the auction process and increasing publisher revenue. According to Google, publishers eventually saw positive results from the changes, with some experiencing a neutral to positive impact on their revenue following the UPR implementation.
While Google claims it made adjustments based on publisher feedback, the DOJ argues that the company’s ability to make such changes unilaterally indicates a monopolistic hold over the ad tech market. As the trial continues, the DOJ aims to prove that Google’s market dominance allowed it to make moves that favored its own business at the expense of the publishers.
Key Points:
i. The DOJ alleges Google manipulated its ad product rules to consolidate control in the ad tech market, leading to its current antitrust trial.
ii. Unified Pricing Rules (UPR) removed publishers’ ability to set different price floors for various ad exchanges, benefiting Google at their expense.
iii. Publishers expressed frustration over the changes, arguing it removed critical control over pricing and favored Google’s interests.
iv. Google claimed UPR was introduced to enhance auction transparency and publisher revenue, though the DOJ argues this showcases monopoly power.
v. The trial aims to demonstrate Google’s dominance in ad tech, with the DOJ arguing publishers had little choice but to comply with the changes.
Al Santana – Reprinted with permission of Whatfinger News