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.
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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.
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