The Rundown: Highlights as sparks begin to fly on Day 2 of the latest Google antitrust trial
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If you’re reading this, you’ll be aware that a battle to shape the future of the online advertising industry formally began in a courtroom in the District of Eastern Virginia this week, as the U.S. Department of Justice locks horns with Google’s online display ad business.
Following opening arguments, the antitrust case progressed from ad tech market definitions to conduct allegations as witnesses took to the stand and aired their grievances with Google’s growing power in the space during the last 15 years.
The DOJ aimed to demonstrate what many have suspected for years from the witness box, and on Day 2 of proceedings, sparks began to fly as the courtroom heard from some of Google’s most vocal critics from the witness stand and candid testimony from former insiders.
Below are some highlights heard late in proceedings at ad tech’s trial of the century on Sep. 10, including testimony from the first ex-Googler in the guise of Eisar Lipkovitz — an exec who claimed PTSD from his time as Google vp of engineering for display and video ads.
Google labeled critics ’emotional and unproductive’
Vocal Google critic Stephanie Layser, now at AWS but formerly a top exec at News Corp., took to the stand, noting the difficulties of attempting to negotiate with Google, even when those on the other side of the table have the leverage of the world’s (legacy) largest news publisher.
For example, she likened Google’s 2019 rollout of unified-pricing auctions to having products shoved down your throat. She said that after voicing frustrations, she subsequently received feedback from Google that she was “emotional and unproductive,” per Layser’s testimony.
Anti-header bidding efforts were to ‘drain the swamp’
During his video testimony, Lipkovitz recalled how execs at Google allegedly wanted to “drain the swamp” in its battle with header bidding, a term that had recently gained notoriety at the time from usage by former President Donald Trump.
Seasoned Digiday readers will know that header bidding was a means of loosening Google’s stranglehold on online ad auctions — a scenario engineered through the popularity of its publisher-side ad server DFP, per the DOJ’s complaint — that gained popularity in the mid-2010s, thus allowing other supply-side platforms to compete.
“We believed at the time, and I still believe today that a lot of SSPs didn’t actually add much value for real, and so we looked at all of the approaches they’ve taken whether it’s these what we call dirty auction or this convoluted daisy-chaining is a short win for publishers,” he said when asked to explain an internal email exchange which discussed Google’s efforts to counter header bidding, or “clean the swamp.”
Inquisitive voices were quieted, not encouraged at Google
Lipkovitz also described how he was told to stay quiet when he raised his concerns about programs like Unified Pricing Rules, adding that “as a free speech guy,” he wanted to talk more about it rather than less, but he was told not to raise concerns. He also said it became harder and harder to get anything done and that it was a mystery who was even making decisions at Google.
He later talked about having PTSD from some of the people within Google who he said weren’t willing to discuss potential options like bidding rival exchanges, “playing games,” and moving too slowly. “There are a lot of people in. The organization — and I still have PTSD from there — who are not willing to have a Socratic conversation,” he said.
The trouble with transparency in online ad auctions
A big part of the DOJ’s complaint is how Google conducted itself in online ad auctions–concerns raised since Google owns ad tech tools at every tier of such a media trade — with a slew of obscure project names such as “Jedi Blue” or “Project Poirot” poised to be discussed in the coming weeks.
Yesterday, Lipkovitz noted that Project Poirot didn’t affect AdX, but it would lower win rates on other exchanges in a hope of moving bids to AdX. However this wasn’t disclosed to advertisers, publishers or other SSPs.
“I don’t think you win the trust of customers by telling them what they cannot do,” he said in his testimony.
The trial continues…
Of course, Google refutes such allegations, and in the coming four to six weeks, it will doubtless mount its defense, albeit on the opening day of proceedings, Lee-Anne Mulholland, Google’s vp, regulatory affairs said, “Google’s ad tech products are built to work with those of our competitors,” in a blog post, adding “DOJ’s case risks inefficiencies and higher prices.”
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