Texas and a dozen other states joined a lawsuit claiming that Google, the search engine giant, misled online publishers about its pricing format and used the extra money to expand its digital monopoly by manipulating future auctions, according to a report.
“Our amended complaint details how Google manipulates the online display auction to punish publishers and blatantly lies to them about how they run the auction,” Ken Paxton, the Texas attorney general, said, according to The Wall Street Journal.
An un-redacted lawsuit was filed on Friday in the U.S. District Court of New York. The paper said a redacted version was filed in 2020. The recently filed suit offers a glimpse into how the company allegedly used secret programs that lowered sales for some companies but increased them for buyers—which internal correspondence between employees called “insider information.”
Sen. Mike Lee, R-Utah, is set to introduce a bill that would try to rein in the company’s grip on the online ad supply chain, the New York Post reported.
His bill—which could also impact Facebook—would end the company’s “ability to act as a broker for a buyer or seller of ad space while simultaneously owning the exchange where ad space is traded,” the paper, citing an unnamed source, reported.
The bill—if passed—could result in Google having to break up parts of its ad business that amounted to 80 percent of the company’s revenue.
The lawsuit said Google’s current position in the online ad market is essentially like Goldman Sachs owning the New York Stock Exchange, the Post reported.
Roger P. Alford, an antitrust law professor from Notre Dame, told the paper, “A $100,000 stock trade will cost you a few dollars in exchange fees paid to the NYSE.”
“But a $100,000 ad campaign will cost you $20,000 in fees paid to Google’s exchange,” he said.
“It’s hard to me to imagine a circumstance in which one can own the exchange platform and also be a buyer, seller, broker, dealer and whatever other positions they might occupy,” Lee said during a Senate hearing last month, according to the Post. “It’s hard for me to imagine how one firm can maintain all of those positions without something anticompetitive going on.”
TRENDPOST: John Wanamaker, one of the grandfathers of advertising, said a century ago, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
The Trends Journal has reported extensively on online advertising fraud. See our 5 June 2017 detailed summary and analysis “Fake news? How about fake advertising?” We noted in that article the amount of wasted advertising dollars companies are spending:
Moreover, earlier this year, major advertisers, with distinguished and well-established brands, became concerned that their digital ads were unknowingly and routinely appearing on so-called “fake news” or other sites that were contrary to the marketers’ message, as well as YouTube video platforms that could tarnish their brands.
As such, JPMorgan Chase, apparently riled about this revelation, conducted an experiment with, for the digital marketing world, unexpected ground-shaking results. Again, reported one day, out of the news the next day.
As a March 30, 2017 headline in The New York Times read: “A Bank Had Ads on 400,000 Sites. Then Just 5,000. Same Results.”
And as The Times reported the same day: “Now, as more and more brands find their ads next to toxic content like fake-news sites or offensive YouTube videos, JPMorgan has limited its display ads to about 5,000 websites it has pre-approved…”
And what happened? No detectable change in advertising-response metrics from 5,000 select websites to 400,000 automated digital-advertising posts.
And, the Trends Journal has reported extensively on the reach of Big Tech. (See “SEARCH & BUY: GOOGLE & AMAZON BATTLE FOR DOMINANCE; “AS GOES GOOGLE TRENDS.”)