‘Monopoly’ tech giant faces explosive allegations

Google antitrust case: ‘Monopoly’ tech giant faces explosive allegations

Alphabet Inc’s Google is part ‘pitcher, batter and umpire’, a US state lawsuit claimed in its plea alleging the internet giant competed ‘unfairly and deceptively’ in the advertising technology company using its dominant position. That’s not the only allegation Google is facing, there are several other serious charges brought by no less than 17 US states against the tech major.
The antitrust case against Google – the most powerful ad-tech company on the planet – was initiated by Texas, but later joined by 16 other states, including Florida, Alaska, Utah, Idaho and Nevada. This case dates back to July 2021 but was recently changed as states released more details.
Here are the top nine serious and explosive allegations against Google in the 236-page complaint.

1.Google is part pitcher, part beater, part referee

The lawsuit claims that Google is not just a search engine, but that it connects all parties to digital advertising, bringing together on the one hand the offer of publishers on websites and in applications, bringing together other demand for this offer from marketers who buy advertisements. , and owning the software that manages the complex auction process. The states allege the company is “the largest e-commerce marketplace in existence.”

According to the lawsuit, Google is both the biggest buyer on this exchange and the biggest seller. The insider opportunities are obvious, and in baseball terms, states say, because Google owns the largest AdX ad exchange, it’s “pitcher, batter, and umpire, all rolled into one.”

2. Google “abuses” consumer data

The company earns billions of dollars a year by “deceptively using individuals’ personal information to engage in targeted digital advertising,” according to the lawsuit.

Although Google has legitimately won the search advertising market, it is unfairly and deceptively competing in the display ads business, he alleges.

Google is misleading when it says “we will never sell your personal information to anyone,” the lawsuit said, adding that its entire business model depends on using personal data to target ads. In addition, according to the states, Google shared private personal data about individuals with Facebook for identification purposes and to measure advertising inventory.

3. Google is a “monopoly”

“Google is a monopoly and engages in a wide variety of behaviors that only a monopoly can perform. The Supreme Court has warned that there are such things as antitrust wrongs. This litigation will establish that Google is guilty of these antitrust wrongs, and it seeks to ensure that Google will no longer be evil,” states say. States also explicitly claim that Google is a monopoly, which they will have to prove in court.

4. Google has “monopoly power” and abuses it

“When it comes to display advertising on the web, Google has monopoly power in the markets for ad servers, exchanges, and ad buying tools for small advertisers…Google is abusing its power to suppress competition , harming consumers and reducing innovation.” Google has monopoly power over nearly the entire ad tech stack on the web, according to the lawsuit.

5. Google “manipulates” advertising auctions for its own benefit

“Google’s ‘Bernanke’ program manipulates auctions to increase its participation rate, then uses the resulting pool of ill-gotten gains to manipulate subsequent auctions, significantly harming competition in the forex market and on the market for shopping tools for small advertisers,” the lawsuit alleges. .

States are of the view that Google does not conduct fair advertising auctions. It also replaces publisher base inventory prices, according to the states, and “misleadingly increases the amount advertisers must pay for impressions on AdX.” According to the states, Google told advertisers one thing but did another:

“Google’s secret ‘Bernanke’ program surreptitiously shifted Google’s AdX exchange from a second-price auction to a third-price auction on billions of impressions per month.” It costs publishers “more than 40%” of their potential revenue, according to the states. Google coined “Bernanke” after seeing Google Ads buyers lose in AdX to competing buyers.

6. Google teamed up with Facebook to kill header bidding

“Facebook reduced its involvement in header auctions in exchange for Google giving information, speed and other benefits to Facebook. The parties also agreed in advance to quotas for how often Facebook would win publishers’ auctions – literally manipulating the auction with minimum spend and quotas for how often Facebook would bid and win,” the lawsuit said.

One of the “anti-competitive advantages” the states allege Google reserved for itself was to use its dominance over ad servers (DFPs) to obtain a right of first refusal on all ad inventory sales.

“Rather than sequentially calling a publisher’s preferred exchanges and assigning the impression to the first exchange able to reach its respective floor price, Google’s dynamic allocation program instead instructed DFP to allow AdX view the average historical bids of competing exchanges and then process the publisher’s impression of whether AdX could return a live bid for only a penny more than the highest of those historical bids,” the lawsuit alleges.

7. Google has market power, but not a monopoly, over in-app ad mediation

“In 2017, Facebook estimated that Google’s mediation tools accounted for 39% of all embedded impressions sold indirectly, and it predicted that number would increase to 68% by 2020. Facebook’s prediction closely aligned with the goal of Google to mediate 65% of in-app impressions in 2020. In comparison, Google’s closest competitor (MoPub) generated only 20% of all in-app impressions in 2017,” the filing states.

In-app mediation is a mobile app’s equivalent of an ad exchange, where an in-app ad mediation tool offers and sells ad impressions to the highest bidder, he said. declared. States estimate that Google’s actual market share in in-app ad mediation is “over 60%”, with competitors such as ironSource and AppLovin taking the lion’s share of the rest.

8. Google’s fees are “much higher” than competitors’ and sometimes go undisclosed

“Google’s AdX charges publishers 19-22% of exchange prices, which is double or quadruple the prices of some of its closest competitors. For example, if $100,000 of a publisher are traded through AdX, Google will extract at least $19,000.” alleged in the record.

This is clear evidence of Google’s monopoly power in ad exchanges, according to the states. And even Google recognizes that a well-run stock exchange should – like a stock exchange – be essentially free, like a public service.

9. Google has a “monopoly” in the US ad exchange market

“Google has a monopoly on the forex market in the United States…because it contains a large and unique pool of advertisers not available in any other market — the offers belonging to the hundreds of thousands of advertisers using the tool. ‘Google’s monopoly purchase of small advertisers, Google Ads’, they state in their complaint.

According to the states’ own figures, “AdX accounts for at least 44 billion web display transactions per month in the United States,” which the states’ lawsuit says is only about 30% of all monthly transactions on all local ad exchanges. While 30% clearly doesn’t sound like a monopoly, the states claim it’s because using Google’s ad exchange is the only way to access all those advertisers using Google Ads.

According to the filing, advertisers using Google Ads purchased a slight majority – 52% – of all impressions on Google’s AdX exchange in 2018 and 2019.

Note: Google, however, denies all allegations and intends to fight them in court.

About Wilhelmina Go

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