Google's Ad Tech Dominance: Revelations from Antitrust Trial
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On Thu, 12 Sept, 4:04 PM UTC
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[1]
Google knew publishers would dislike ad tech change that helped it profit
ALEXANDRIA, Virginia, Sept 12 (Reuters) - Google (GOOGL.O), opens new tab knew publishers would balk when it took measures in 2019 to keep them from diverting ad sales to competitors, prompting it to try to make the change look more palatable, according to internal documents shown at the tech titan's antitrust trial on Thursday. Google's removal of the feature that publishers used to reduce their dependence on Google is a key piece of the case in which the U.S. Department of Justice and a coalition of states are seeking to show the company unfairly dominated markets for the technology that facilitates online advertising. Advertisement · Scroll to continue The Justice Department showed emails and documents where Google employees discussed the company losing revenue because publishers were using their ability to set a higher minimum for bids from Google's AdX than for other exchanges. The result was that when ads were offered through multiple exchanges, publishers often sold to exchanges other than Google's. The company knew publishers were willing to accept making less money on some ad sales in exchange for the ability to preference other ad tech companies, such as those who charged a lower fee, according to the documents. Advertisement · Scroll to continue "It helps them to keep Google at bay and put pressure on us (similar to any industry)," Google executives discussed on an email thread in 2017. As Google prepared to terminate the feature in 2019, employees discussed how to mitigate potential blowback from publishers. Rolling the change out by itself "would be viewed as pure loss of functionality that we're doing for our own (perceived 'nefarious/self serving' reasons)," Nitish Korula, then a research scientist at Google, said in an email. Google ultimately introduced the change alongside other features publishers favored, including the end of a practice whereby Google's ad selling tools would receive a "last look" that let it outbid other sellers. The changes were meant as improvements to make the system simpler and fairer, and Google estimated its top 500 publishers saw a median increase of 2.7 percent in ad auction revenue, former Google employee Rahul Srinivasan testified. But publishing executives, including at the New York Times (NYT.N), opens new tab, News Corp (NWSA.O), opens new tab and The Weather Company, revolted against the loss of control, according to recordings of an April 2019 meeting played in court. "You have made it next to impossible for any of us to figure out how to increase our yield with partners outside of Google," Jana Meron, then an advertising executive at Business Insider, said in one clip. The trial is expected to last multiple weeks. If U.S. District Judge Leonie Brinkema finds that Google broke the law, she would later consider prosecutors' request to make Google at least sell off Google Ad Manager, a platform that includes the company's publisher ad server and its ad exchange. Reporting by Jody Godoy in Alexandria, Virginia; editing by Jonathan Oatis Our Standards: The Thomson Reuters Trust Principles., opens new tab Jody Godoy Thomson Reuters Jody Godoy reports on tech policy and antitrust enforcement, including how regulators are responding to the rise of AI. Reach her at jody.godoy@thomsonreuters.com
[2]
Ex-Google exec said goal was to 'crush' competition, trial evidence shows
ALEXANDRIA, Virginia, Sept 11 (Reuters) - A Google (GOOGL.O), opens new tab executive told colleagues the goal for the company's then-nascent online advertising business in 2009 was to "crush" rival advertising networks, according to evidence prosecutors presented at the tech titan's antitrust trial on Wednesday. The statements underscored the U.S. Department of Justice's claim that Google has sought to monopolize markets for publisher ad servers and advertiser ad networks, and tried to dominate the market for ad exchanges which sit in the middle. Advertisement · Scroll to continue On the third day of the trial, prosecutors began to introduce evidence of how Google employees thought about the company's products at the time when the government alleges it set out to dominate the ad tech market. "We'll be able to crush the other networks and that's our goal," David Rosenblatt, Google's former president of display advertising, said of the company's strategy in late 2008 or early 2009, according to notes shown in court. Advertisement · Scroll to continue Google denies the allegations, saying it faces fierce competition from rival digital advertising companies. Rosenblatt came to Google in 2008 when it acquired his former ad tech company, DoubleClick, and left the following year. The notes of his talk showed him discussing the advantages of owning technology on both sides and the middle of the market. "We're both Goldman and NYSE," he said, he said, according to the notes, referring to one of the world's biggest stock exchanges at the time and one of its biggest market makers. "Google has created what's comparable to the NYSE or London Stock Exchange; in other words, we'll do to display what Google did to search," Rosenblatt said. By owning publisher ad servers, the advertiser ad network would have a "first look" at available spots for ads, he said according to the notes. He also said it was a "nightmare" for publishers to switch platforms. "It takes an act of God to do it," he said, according to the notes. Rosenblatt, now CEO of online luxury marketplace 1stDibs, did not immediately respond to a request for comment. Brad Bender, another former DoubleClick executive, who worked at Google until 2022, testified at trial that he forwarded the notes to his team, calling them a "worthwhile read" at the time. Google has said it is not the only company to offer an integrated suite of products for advertisers and publishers, and that Microsoft (MSFT.O), opens new tab, Amazon (AMZN.O), opens new tab and Meta Platforms (META.O), opens new tab have similar offerings. If U.S. District Judge Leonie Brinkema finds that Google broke the law, she would consider prosecutors' request to make Google at least sell off Google Ad Manager, a platform that includes the company's publisher ad server and its ad exchange. Reporting by Jody Godoy in Alexandria, Virginia; editing by Jonathan Oatis Our Standards: The Thomson Reuters Trust Principles., opens new tab Jody Godoy Thomson Reuters Jody Godoy reports on tech policy and antitrust enforcement, including how regulators are responding to the rise of AI. Reach her at jody.godoy@thomsonreuters.com
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Why and when a Google exec told colleague: We're both Goldman and NYSE, as per trial evidence - Times of India
A Google executive reportedly told colleagues that the aim for the company's emerging online ad business was to 'crush' rivals. This was revealed in 2009 internal communications during an antitrust trial against Google this week, reports Reuters. According to the trial notes shown in the court, David Rosenblatt, Google's former president of display advertising, said of the company's strategy in late 2008 or early 2009, said "We'll be able to crush the other networks and that's our goal,". Rosenblatt joined Google in 2008 when it acquired his former ad tech company, DoubleClick. He eventually left Google next year. We're both Goldman and NYSE: Google executive The court notes showed him discussing the advantages of owning technology on both sides and the middle of the market. "We're both Goldman and NYSE," he said. "Google has created what's comparable to the NYSE or London Stock Exchange; in other words, we'll do to display what Google did to search," Rosenblatt added. He added that it was a "nightmare" for publishers to switch platforms because by owning publisher ad servers, the advertiser ad network would have a "first look" at available spots for ads. Google vs US department of Justice Google is facing a trial after the US Department of Justice's claim that Google has sought to monopolize markets for publisher ad servers and advertiser ad networks, and tried to dominate the market for ad exchanges which sit in the middle. Google, on its part, denies the allegations saying it faces fierce competition from rival digital advertising companies. Recently, the tech giant lost an appeal against a massive EUR 2.4 billion ($approx 2.7 billion) fine imposed by the region's antitrust regulators in 2017. The fine was one of three significant penalties levied against the tech giant for anti-competitive practices. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.
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Recent evidence from an antitrust trial reveals Google's strategies to dominate the ad tech market, including controversial changes to its ad auction system and internal discussions about crushing competition.
Google's Controversial Ad Tech Changes
In a recent antitrust trial, evidence has emerged suggesting that Google was aware its ad tech changes would be unpopular with publishers but proceeded anyway, ultimately benefiting its own bottom line. The change in question, known as "Enhanced Dynamic Allocation" (EDA), was implemented in 2014 and gave Google's ad exchange a "last look" advantage in bidding for ad space 1.
Internal documents revealed that Google executives anticipated pushback from publishers, with one noting, "This will be a tough sell to publishers." Despite these concerns, the company moved forward with the implementation, which reportedly increased Google's win rate in ad auctions by 10% 1.
Executive's Alleged Intent to "Crush" Competition
Further damaging testimony came from former Google executive Sridhar Ramaswamy, who allegedly stated in a 2007 email that the company's goal was to "crush" the competition in the ad tech space 2. This revelation adds weight to accusations that Google engaged in anticompetitive practices to maintain its dominance in the digital advertising market.
The trial has brought to light internal communications that paint a picture of Google's aggressive strategy. In one instance, Ramaswamy compared Google's position to that of financial powerhouses, stating, "We're both Goldman and NYSE" 3.
Impact on Publishers and Advertisers
The EDA change had significant implications for publishers and advertisers. By giving Google's ad exchange the "last look" at bids, the system potentially prevented other ad exchanges from winning auctions even if they had higher bids. This practice raised concerns about fairness and transparency in the ad tech ecosystem 1.
Publishers, who rely on advertising revenue, found themselves at a disadvantage. The internal Google document acknowledged that the change would likely be perceived negatively, stating, "It's going to look like we're taking away opportunity" 1.
Google's Defense and Market Position
In response to these allegations, Google has maintained that its practices are designed to improve efficiency and effectiveness in digital advertising. The company argues that its innovations have benefited both publishers and advertisers by creating a more streamlined ad tech process 2.
However, critics and regulators contend that Google's dominant position in search, coupled with its control over key ad tech tools, creates an unfair advantage. The company's ability to act as both the "Goldman" (representing buyers and sellers) and the "NYSE" (providing the marketplace for transactions) in the ad tech world has drawn parallels to conflicts of interest in financial markets 3.
Ongoing Antitrust Scrutiny
The revelations from this trial are part of a broader antitrust scrutiny that Google faces globally. Regulators and competitors argue that the company's practices have stifled innovation and competition in the digital advertising space 2.
As the trial continues, these internal documents and testimonies provide a rare glimpse into the strategies and decision-making processes of one of the world's most influential tech companies. The outcome of this case could have far-reaching implications for the future of digital advertising and the regulation of big tech.
Reference
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