Tech

Google misunderstands publishers and advertisers, alleging unedited proceedings

Google has misunderstood publishers and advertisers over the years about advertising auction pricing and processes, and some companies’ sales have been reported in newly unedited claims and details of the proceedings by the State Attorney General. We have created a secret program to reduce the number of buyers and raise the price of buyers.

Meanwhile, Google has been newly edited to pocket the differences in what it told publishers and advertisers about advertising costs and use its pool of funds to manipulate future auctions and expand its digital monopoly. No complaints claim. These documents cite internal communications that Google employees have stated that some of these practices can lead to business growth through “insider information.”

Friday’s unedited submission to the US District Court in the Southern District of New York came after a federal judge ruled this week that he could open the amended complaint filed last year.

The proceedings were first filed in December 2020 and many sections of the complaint were edited. Since then, the edits have been removed in a series of rulings, providing fresh details about the state’s allegations that Google is carrying out a monopoly that has damaged competitors and publishers in the advertising industry.

Google said it intends to file a motion to dismiss it next week. A spokesman for one company said the proceedings were “full of inaccuracies and had no legal merit.” “Our advertising technology helps websites and apps fund content and enables small businesses to reach customers around the world. Online advertising is fiercely competitive.”

Buying and selling ads on the Internet is a complex process, and Google plays a huge role as both auction participants and managers who determine sales. Google owns key tools in every link in the chain between online publishers and advertisers, giving it its own power to monetize digital content. It also owns major platforms for reaching consumers, such as YouTube. As a result, rivals have complained that tech giants have been able to tilt the market in their favor, win more bids and seize competition. The corrected complaint and its unedited details are intended to clarify how it actually works.

In a lawsuit led by Texas Attorney General Ken Paxton with more than 12 states, Google’s business practices are arguing that advertising spending is rising and brands are passing on to consumers with more expensive products. increase. Google also claims to limit competition with rival exchanges and limit its website’s ad serving options, using internal comparisons with banks that own the New York Stock Exchange.

“Our revised complaint details how Google operates online display auctions to punish publishers, and is blatantly lying about how they run the auction.” Mr Paxton said.

The proceedings are complemented by another antitrust proceeding by the US Department of Justice and more than 30 state prosecutors focused on Google’s search services. The case will be brought to justice after 2023.

Meanwhile, 12 Republicans and Democrats in the Senate treat Google’s search engine like a railroad operator and illegally use their products and services at the expense of other platform-dependent companies. We are working on a bill to do. Digital advertising analysts say that if successful, Google could be forced to spin off or sell its ad tech business, formerly known as DoubleClick Inc.

In addition to detailing some of Google’s programs, new complaints are from Alphabet and Google CEOs Sundar Pichai and Meta Platforms Inc. Mark Zuckerberg, CEO of Meta, said Facebook, a subsidiary of Meta, has signed a 2018 business deal allegedly bid and guaranteed to win. -A percentage of advertising auctions. It was previously reported that the deal was signed by Google Chief Operating Officer Philipp Schindler and Facebook Chief Operating Officer Sheryl Sandberg.

State lawyers claim it is an illegal price-fixing agreement. Both companies state that it is beyond the board of directors.

The newly unedited details provide more information about Google’s set of programs, Project Bernanke, Reserve Price Optimization, and Dynamic Revenue Share. The Bernanke program has been previously reported, but a newly unedited complaint reveals that there were three versions between 2010 and 2019.

In the first version, Google misunderstood publishers and advertisers as participating in a “second price auction.” In this auction, the winner pays the second highest bid when using the advertising exchange AdX. Complaints. However, Google’s Bernanke program could steal revenue from publishers because AdX could knock out the second highest bid and win the third highest bid. At the same time, Google will charge advertisers the second highest bid price and put the difference in their pockets, the complaint said.

Google pools advertiser overpayments and uses that money to operate auctions on the system, sometimes increasing bids from advertisers who bid through ad buying tools, and winning auctions that would otherwise not be available. I guaranteed that.

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According to complaints, this affected billions of ad impressions sold each month, and according to a Google study, publisher revenue fell by as much as 40%. “Bernanki is powerful,” said one Google employee, according to internal communications quoted in the complaint.

The second version of this program, called Global Bernanke, uses a pool of funds raised by Google, originally called AdWords, and now Google Ads for small advertisers. Inflated only the bids that belong to the ad purchase tool of. If not, the complaint claims to lose the auction on Google’s exchange.

A third version of a program called Bell penalizes publishers who didn’t provide Google with what’s called “priority access” to inventory by redirecting the pool of collected funds to inventory. I am alleging that I did. According to the complaint, publishers were only eligible to receive these funds if they participated in Google programs such as dynamic allocation. This gives Google’s AdX the right to first reject competing exchanges at the auction.

A Google spokesman said Bernanke was implemented to “optimize advertiser bids” and is one of the improvements made to intensify competition and make advertising more effective for businesses. rice field.

In the booking price optimization program, Google used historical data about an advertiser’s previous bids to set the advertiser’s “floor” or lowest price. As a result, advertisers are paying higher prices. In one of the newly unedited corporate communications, Google employees said the program should be based on “smart and technology” rather than “insider information.”

New details are further dynamics triggered by another program, Dynamic Revenue Share, where Google employees have changed the fees that Google’s ad exchanges collect in order for Google’s tools to win more auctions than any other way. It suggests that he was wary of. The complaint alleges that Google dominates the publisher’s ad server market and only did this after it could see what its rivals had bid on.

The program “dishonests the auction because it looks at buyers’ bids and determines AdX’s revenue sharing,” one Google employee wrote in the newly unedited complaints section. ..

A Google spokeswoman said these programs do not operate auctions and are designed to help publishers maximize ad sales.

Write in Tripp Mickle at Tripp.Mickle@wsj.com and Keach Hagey at keach.hagey@wsj.com

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Google misunderstands publishers and advertisers, alleging unedited proceedings

Source link Google misunderstands publishers and advertisers, alleging unedited proceedings

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