At the end of the first week of US v. Google, the Department of Justice presented evidence that the company’s rationale behind controversial topics, like how much to collect in fees and how much publishers can charge to sell ads, was different from what it told the public.
The DOJ has been building its case that Google operates a monopoly with tools that buy and sell ads for advertisers and publishers. During two separate testimonies, DOJ lawyers presented email evidence that Google executives saw a different rationale for policies than how Google presents its ad business and these changes to the public.
The Sept. 13 testimony of Chris LaSala, a former Google executive who worked on the sales operation of Google’s publisher-facing adtech products, focused on take rates, how much Google collects from advertisers in exchange for using its tools. LaSala testified that he raised concerns internally that Google’s tech wasn’t worth the price it charged.
And a day earlier, Rahul Srinivasan, a former Google sell-side product manager, testified about Unified Pricing Rules, a controversial policy which let Google have greater control on the prices publishers could set for their inventory. Srinivasan’s testimony implies that Google made the change for their own benefit, without telling publishers this rationale.
Justifying high ad prices
During LaSala’s testimony, Department of Justice lawyers shared old emails LaSala wrote that questioned the 20% take rate of AdX. AdX is Google’s publisher-focused tool that allows publishers to sell their inventory to multiple advertisers.
The email evidence is important because the DOJ has maintained in its case that Google’s take rates are significantly higher than its competitors. The DOJ is also trying to show that Google’s take rates stayed stagnant for many years because they did not have to compete.
“I don’t think there is 20% of value in comparing two bids,” LaSala wrote in a 2018 note to colleagues. “AdX is not providing additional liquidity to the market. It is simply running the auction. The value of our platform is not in AdX. It is in other parts.”
LaSala’s email went on to specify that AdX’s value comes from the Google Ads ad network, formerly known as AdWords—Google’s advertising-product that allows small marketers to buy ads. This plays into a key part of the DOJ’s case that Google runs a monopoly in the adtech business. The DOJ alleges that Google used its market power as a top ad network to try to monopolize another market—the publisher-focused ad exchange.