What to know about The Guardian-Rubicon Project lawsuit
The Guardian is suing Rubicon Project, alleging the vendor siphoned undisclosed fees from programmatic advertising buys across its site. Rubicon Project has since filed a counterclaim, denying liability. The lawsuit, which is ongoing, will likely have a lasting effect on the transparency in digital advertising trading. Below are key updates.
The Guardian’s case:
- In its court filing, the Guardian claimed Rubicon Project retained “substantial sums” in addition to the fixed-percentage fees. These “secret commissions” allegedly were obtained without the Guardian’s knowledge or consent.
- The publisher claims it was kept in the dark by Rubicon Project, which provided “misleading and inaccurate” monthly reports regarding the total amount of money received from buyers of the Guardian’s inventory.
- Rubicon Project allegedly didn’t inform buyers exactly how much of what they paid would be retained by Rubicon Project and not the Guardian.
- The Guardian has also claimed that not having visibility of how much buyers were willing to pay for its media caused revenue damage.
- The Guardian is asking to be reimbursed the money lost, plus interest and compensation costs, according to court filings.
“It is to be inferred that the concealment of the Defendant’s receipt of these secret commissions and their omission from the monthly earnings report must have been deliberate,” read the Guardian News & Media filing.
Rubicon Project’s defense:
Rubicon Project filed a counterclaim in which it denies all liability. In its filing to the courts, the vendor claimed that although it did charge buyers an additional fee to its own service costs and didn’t pass that back to the Guardian, it was legally entitled to do so. Furthermore, Rubicon Project claimed:
- The Guardian was fully aware it was doing this.
- The publisher had consented for it to do this.
In its counterclaim, Rubicon Project said the Guardian breached its own contract by allowing other third parties to sell its non-guaranteed ad inventory. Rubicon Project has stated it wants its legal costs covered, to be paid “damages in an amount to be assessed by the Court.”
“There was no deliberate concealment of the defendant’s receipt of the buyer fees, nor were they secret commissions,” the Rubicon Project court filing states.
Key numbers and dates:
- $1.5 million (£1.2 million): sum potentially withheld from the Guardian
- 10 percent on revenue generated: Rubicon Project’s contractual fee for selling the Guardian’s digital inventory
- 2010-2016: When the alleged breach of contract occurred
- Dec. 21, 2016: Rubicon Project’s legal counsel writes a letter to the Guardian saying it is under no contractual obligation to provide information about buyer fees.
- Jan. 31, 2017: Rubicon Project denies the Guardian has audit rights on buyer fees, but says it will oblige and allow an audit.
- March 2017: The Guardian launches its claim with the courts.
- May 2017: Rubicon Project files a counterclaim.
- Number of pages in the Guardian’s claim: 19
- Number of pages in Rubicon Project’s counterclaim: 36
- No court date has been set.
The publishers’ view:
It’s unknown if a legal battle will solve the underlying problems in ad fee transparency. But publishers hope the outcome will result in a healthier digital ad ecosystem.
“I’m not sure whether this is the right way to settle differences, but the coverage will create more sensitivity around fees, which is healthier for the industry. Full disclosure and transparency will help programmatic,” said a senior publisher exec who spoke on condition of anonymity.
Others believe it will trigger the start of full transparency on take rates and that ad tech vendor margins will likely drop as a direct consequence.
The big picture:
Whatever the outcome, big transparency issues exist in ad tech, and publishers across geographies are fighting for more control in the digital media supply chain. The Guardian isn’t the first publisher to have questions for Rubicon Project about hidden fees. Dutch media group De Persgroep was frustrated by certain fees the vendor drew in the last year that the publisher hadn’t initially known about, according to Digiday sources. De Persgroep has not filed a lawsuit.
A spokesperson for the publisher said: “De Persgroep has not filed a lawsuit against Rubicon Project, but [it is] following the discussion closely. We, too, want an ecosystem with transparent cost models and an unbiased exchange for both publisher and buyer. This lawsuit [with the Guardian] is part of the broader debate on transparency in programmatic trading.”
Digiday obtained most of the information in this cheat sheet from court filings.
Why independent Black-owned media companies are not participating in agency multicultural marketplaces
Advertising agencies are launching new multicultural PMPs but some Black-owned media companies are refraining from joining.
‘We don’t have visibility’: Google’s ad targeting limits expose publishers with reliance on open programmatic market and first-party data weakness
Most digital publishers connect to Google’s ad tech in some way, but those reliant on open programmatic ad exchanges, and without robust first-party data solutions, could be hurt by Google's data decisions.
Cannabis and the workplace: The pandemic has bosses and employees craving its benefits
Employees and employers are turning to the benefits of cannabis to relax as they continue to navigate the pandemic.
SponsoredHow publishers are maximizing retention after the COVID-19 subscription surge
Michael D. Silberman, senior vice president of strategy, Piano For many publishers, 2020 was a good year for subscriptions, and the trend has continued into 2021. For example, over the last month, The New York Times grew active news subscriptions by 48%, and Insider has doubled its subscriber base to just over 100,000 in the […]
Member ExclusiveGlobal Publishing Summit Recap: prepare for a world without cookies
If you were listening in to our Global Publishing Summit on February 24-26, you’re probably still processing the wealth of insights, tips and strategies shared by all the speakers we heard from over the course of the summit. If you weren’t able to attend, fear not: we’re here to distill the key talking points from […]
Member ExclusiveMedia Buying Briefing: Black-owned media companies step to the forefront of the upfront
Mediabrands is bringing together a raft of its biggest clients — about 20 Black-owned and Black-targeted media players — for an Equity upfront.