Google accused of defrauding publishers, advertisers and pocketing revenue

(Photo: Pawel Czerwinski/Unsplash)New details of an ongoing lawsuit against Google reveal that the company deceived those involved in its advertising business for years, resulting in increased cash flow which Google then pocketed.

This information follows a lawsuit filed by ten states in December 2020, in which a handful of Republican attorneys general for follow-up the tech giant for forming a monopoly around its web search and digital advertising services. The complaint pointed out that Facebook had emerged in 2017 as a viable competitor to Google and that Google had quickly dealt with the potential rivalry by initiating a compromise: Facebook would reduce its competitive actions in exchange for preferential treatment in advertising auctions managed by Google. . . Over the course of 12 years, according to the lawsuit, Google has gradually dominated the digital advertising market, beginning with its acquisition of DoubleClick in 2008.

Coincidentally (or not), this followed another trial filed by the Department of Justice two months prior, in which the DOJ alleged that Google had abused its market position to hinder competitors and retain its place at the top of the search and advertising food chain. Of course, Google has denied the allegations made in both lawsuits, calling them “baseless” and “baseless” while promising to relentlessly defend itself in court.

Much of the December lawsuit has been redacted over the past year, leaving most of the public out of the loop when it comes to the details of Google’s alleged wrongdoing. Now a federal judge has decided an edited version of the complaint could be unsealed, allowing unredacted fragments of the suit to surface. Among them is the allegation that Google created secret programs in its ad auctions that increased advertising costs for buyers while decreasing sales for businesses.

A Google Secret Directory program involved the company using an advertiser’s previous bids to set minimum prices for that specific advertiser, resulting in higher bids in the future. Another program changed Google’s ad exchange fees to help Google’s own tools win auctions they previously would have lost. According to the complaint – which cites internal correspondence between Google employees – the company pocketed the extra revenue and used it to manipulate future auctions and grow its digital monopoly.

The case (along with the DOJ lawsuit) is not expected to go to trial until 2023. As does the Federal Trade Commission’s antitrust complaint against Facebook, Google could be forced to sell its monopoly assets (including DoubleClick) if the final verdict is not in its favour.

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