The DOJ alleges Google has an unfair advantage in ads

Lipkovitz said that it would be advantageous for the advertising clients of Google Ads to be able to bid on other exchanges besides AdX. Google Ads is Google’s network of small advertisers.

Lipkovitz’s testimony also focused on AdX having exclusive access to Google Ads inventory, which is a key piece of the DOJ’s case against Google. The DOJ alleges that Google’s tying of multiple ad products shows that Google is a monopoly.

In an email from 2015 that entered the public record as a result of this testimony, Lipkovitz wrote that “most of us agree that GDN [Google Display Network, also known as Google Ads] is in an inferior place vis a vis the competition on impressions that go to other exchanges or situations where a buyer has direct relationship with the publisher.”

A 2016 email, now available to the public, showed that Google viewed AdX’s exclusive relationship to Google Ads as a competitive advantage. Jerome Grateau, then Google’s director of global publisher solutions and innovation, wrote to Lipkovitz that Google’s ad server and AdX were built on three core differentiators.

“1/Best “traditional” Adserver 2/ Dynamic allocation,” Grateau wrote, referring to a tool which gave AdX an exclusive first look at all bids. “3/Exclusive access to GDN demand, justifying a 20% rev share and strict Sell Side policy.”

“This value proposition will be diluted if 3rd party exchanges have access to GDN’s 2m+ advertisers with real time pricing integration,” Grateau added.

Google allegedly had high take rates

Another big part of the DOJ’s case focuses on the advent of header bidding that happened about a decade ago. Publishers and Google’s rival publisher-focused adtech firms developed software that allows ads to be sold through multiple publisher-side tech platforms—partly to avoid using Google’s ad tools that work together. Header bidding also gave publishers more ways to sell ads using supply-side platforms.

Header bidding increased competition in the market and led to rival SSPs lowering their take rates. But Google did not lower prices, maintaining a take rate of 20%, Lipkovitz said. This was a significantly higher cut than its competitors. The DOJ argues that Google’s decision to not drop its take rate shows that Google did not need to drop prices to maintain its dominance.

When asked why AdX had a higher take rate than competitors, Lipkovitz said, “Neal decided probably,” referring to Neal Mohan, the current CEO of YouTube who formerly oversaw display and video ads at Google.