Commentary

Antitrust Suit Targeting Google's Ad Operations Is Critical for Publishers

The antitrust lawsuits against Google are piling up, with two more complaints filed this week. Among the three suits, the one targeting the search giant's dominance in digital display advertising may have the greatest effect on publishers.

Ten state attorneys general on Wednesday sued Google in U.S. District Court in Texas, accusing the company of overcharging publishers and abusing its power in advertising. The lawsuit was the first by regulators in the United States to aim attention at Google's dominance in the software tools that buyers and sellers use in automated auctions of ad space on websites. The Justice Department is said to be working on a separate probe into Google's advertising technology, according to several news reports.

The prosecutors' lawsuit seeks monetary damages from Google, pleading that the court should restrain Google’s behavior in several ways, such as “structural relief to restore competitive conditions in the relevant markets.”
The wording is vague, and doesn't prescribe that Google undo acquisitions, such as its 2008 takeover of DoubleClick. The ad-tech pioneer was the basis for services like DoubleClick for Publishers, later renamed Google Ad Manager, which help content providers sell ad space. Google also owns buying platforms, such as DV360, and an online marketplace called AdX that brings buyers and sellers together.
In addition to claiming Google illegally ties these services together in a way that gives it an unfair advantage, the suit alleges that the company concocted a secret program to harm publishers. Code-named "Jedi Blue," a reference to the “Star Wars” movies, the program was touted as a way to give publishers more flexibility in selling ad space among online exchanges, The Wall Street Journal reported.
Instead, Google “secretly let its own exchange win, even when another exchange submitted a higher bid,” according to the lawsuit. Cititing internal Google documents, the complaint describes "Jedi Blue" as a program "to avoid competition" that "consequently hurt publishers.”
The complaint echoes criticism by publishers and trade groups like the News Media Alliance, which this week applauded the suit.
"Quality local journalism has been directly damaged by Google’s anticompetitive conduct, and we look forward to the judicial authorities examining the full range of their behaviors and businesses,” David Chavern, president and CEO of the alliance, said in a statement.
Google described the claims as "meritless" and pledged to defend itself in court.
Because the complaint focuses on Google's ad technology, it's more relevant to publishers than a prior antitrust suit that focused on the company's distribution agreements that make it the dominant search engine. A third suit filed this week by another group of state prosecutors has similar claims, though it also accuses Google of downplaying search engines that specialize in services like home repair and travel reviews.
The suits likely will take years to resolve, either through a judgment or approved settlement. But they promise to add weight to publisher demands for greater transparency into the digital ad market.

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