Texas vs. Google
In a bizarre video posted to the office’s verified Twitter account, Texas AG Ken Paxton says the company “repeatedly used its monopolistic power to control pricing” in online ads. “These actions harm every person in America,” Paxton continues. “It isn’t fair that Google can harm the web pages you visit and read.”
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The most detailed allegation is that Google used its market power to sabotage “header bidding,” a practice that allows advertisers to route a single request through multiple exchanges at once. “Google viewed header bidding’s promotion of genuine competition as a major threat,” the complaint alleges, citing internal communications obtained as part of the probe.
Google eventually adopted the practice, allowing its ad server to route requests through multiple exchanges at once. But according to the complaint, Google rigged that system to rout requests to its own exchange, even when a competitor had submitted a higher bid.
From the complaint (PDF, Hacker News):
As internal Google documents reveal, Google sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook, its largest potential competitive threat, to manipulate advertising auctions.
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Header bidding is only possible if publishers can insert JavaScript code into the header section of their webpages. To respond to the threat of header bidding, Google created Accelerated Mobile Pages (“AMP”), a framework for developing mobile web pages, and made AMP essentially incompatible with JavaScript and header bidding.
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Google ad server employees met with AMP employees to strategize about using AMP to impede header bidding, and how much pressure publishers and advertisers would tolerate. First, Google restricted the code to prohibit publishers from routing their bids to or sharing their user data with more than a few exchanges a time, which limited AMP compatibility with header bidding. At the same time, Google made AMP fully compatible with routing to exchanges through Google. Google also designed AMP to force publishers to route rival exchange bids through Google’s ad server so that Google could continue to peek at rivals’ bids and trade on inside information. Third, Google designed AMP so that users loading AMP pages would make direct communication with Google servers, rather than publishers’ servers. This enabled Google’s access to publishers’ inside and non-public user data. AMP pages also limit the number of ads on a page, the types of ads publishers can sell, as well as enriched content that publishers can have on their pages.
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Google falsely told publishers that adopting AMP would enhance load times, but Google employees knew that AMP only improves the [redacted] and AMP pages can actually [redacted]. In other words, the ostensible benefits of faster load times for cached AMP version of webpages were not true for publishers that designed their web pages for speed.
Google also [redacted] of non-AMP ads by giving them artificial one-second delays in order to give Google AMP a [redacted][…] which Google uses to turn around and denigrate header bidding for being too slow.
One thing I’ve wondered about is how Google convinced so many employees that AMP was good with such transparently bad reasons.
Previously:
- Google Antitrust Lawsuit
- House Report on Competition in Digital Markets
- Google Ad Numbers Don’t Add Up
- Big Tech’s Showdown With Congress
- Google AMP Lowered Our Page Speed, and There’s No Choice But to Use It
- How Fast Is AMP Really?
Update (2021-01-01): Jason Kint:
WSJ has now reported Facebook and Google’s sketchy price fixing deal terms. Alleges the “duopoly” allocated their surveillance advertising biz and this sure seems to back it up.
In 2015, @Facebook signed an exclusive agreement granting @Google access to millions of Americans’ end-to-end encrypted @Whatsapp messages, photos, videos, and audio files
@Google coordinated with @Facebook, @Apple, @Amazon, and @microsoft to delay privacy regulation because of its impact to Google’s ad business.
@Google cut off publishers’ ability to identify users (cookie-sync) purportedly on privacy grounds [p53], but permitted @Facebook to identify users in publishers’ auctions in order to better target and win more often in auctions.
Update (2021-01-18): Daisuke Wakabayashi and Tiffany Hsu:
Executives at six of the more than 20 partners in the alliance told The Times that their agreements with Google did not include many of the same generous terms that Facebook received and that the search giant had handed Facebook a significant advantage over the rest of them.
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The disclosure of the deal between the tech giants has renewed concerns about how the biggest technology companies band together to close off competition. The deals are often consequential, defining the winners and losers in various markets for technology services and products. They are agreed upon in private with the crucial deal terms hidden through confidentiality clauses.
Update (2021-03-23): Adi Robertson and Russell Brandom:
But in the updated complaint, the states apply this argument to Google’s “Privacy Sandbox” — a tool that’s supposed to replace invasive third-party tracking cookies with a more limited system devised by Google.
“Google’s new scheme is, in essence, to wall off the entire portion of the internet that consumers access through Google’s Chrome browser,” the complaint reads. Blocking cookies might broadly be a good thing — other browsers like Firefox and Safari have already done it. But Chrome dominates the browser market, and it’s part of a much larger Google product suite. The suit argues that Google’s plans would require advertisers to use it as a middleman and would make Google’s own advertising system far more attractive.
Previously:
Update (2021-04-16): Malcolm Owen:
Google used a secret program called “Bernanke” that used historical bidding data to give its ad-buying system a major advantage over its rivals, an antitrust lawsuit filing claims, a program that earned the company hundreds of millions of dollars in revenue.
