According to a newly unredacted court filing, Google used its monopoly power to rig the online advertising market and squash competition, including by colluding with Facebook — and one employee compared the plot to a mega-bank like Goldman Sachs owning the New York Stock Exchange.
According to a new version of a lawsuit filed against Google by a group of states led by Texas, the search giant controls top brokerages on both the buy and sell sides of the online advertising market, and takes a 22 percent to 42 percent cut of US ad spending that passes through its systems.
According to the lawsuit, this is two to four times the cut taken by other digital ad exchanges, demonstrating the company’s monopoly.
According to the lawsuit, one Google employee compared the company’s position to “if Goldman or Citibank owned the NYSE.”
According to the lawsuit, another employee warned that the company’s alleged scheme to rig online ad auctions in its favor “generates suboptimal yields for publishers and poses serious risks of negative media coverage if exposed externally.”
Other closely guarded details about Google’s ad business are revealed in the newly unredacted version of the 173-page suit, including the fact that 75 percent of all online display ads seen by American users went through Google’s ad manager service in the third quarter of 2018 and that the company wins a whopping 80 percent of ad auctions on its own exchange.
According to the lawsuit, Google does this by using insider information and secret tools like “Bell” and “Elmo” that “reduce competitors’ ability to compete on price.” According to the lawsuit, programs like these have helped the company generate more than $1 billion in additional revenue.
Many details of the lawsuit were redacted after Google argued that releasing them would unfairly harm its business. In a Friday statement, the search giant said, “We will strongly defend ourselves from [Paxton’s] baseless claims in court.”
“This lawsuit is riddled with inaccuracies,” a Google spokesman said. “In reality, our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world. There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers.”
The lawsuit, which was filed in response to an order from US District Judge for the Southern District of New York P. Kevin Castel, includes more details about an alleged plot between Google and Facebook to maintain Google’s dominance in the online ad space.
Google agreed to give Facebook “an unlawful agreement” to give Facebook “information, speed, and other advantages” in Google-run ad auctions in exchange for the social network backing down from competitive threats against the company, according to the lawsuit.