For each advertising transaction that gets served across the Google exchange, the company takes on average between two and four-times as much as the fees charged by rival digital advertising exchanges--the assertion found in an unredacted lawsuit by state attorney generals led by Texas.
The cut — 22% to 42% of U.S. ad spending that goes through its systems — according to The Wall Street Journal. If true, the suit sheds light on how Alphabet profits from its position in advertising.
The bipartisan group of attorneys general representing nearly every state launched an antitrust investigation into Google in September.
A federal judge ruled last week that much of the antitrust suit could be unsealed, and on Friday released the unredacted filing in the U.S. District Court of the Southern District of New York.
The suit also cites programs with code names Bell, Elmo and Poirot that helped Google generate more than $1 billion in sales, which provides a view into Google’s dominance in advertising. It also
Peter Schottenfels, a Google spokesman, called the lawsuit flawed, and told the WSJ that it’s “riddled with inaccuracies and our ad tech fees are actually lower than reported industry averages.”
Some marketers called 22% low. The suit alleges the company has deployed strategies to “lock in” publishers and advertisers and help the company’s ad buying tools win more than 80% of auctions on its exchange.
Smaller advertisers also pay large fees, but transact on a separate system called Google Display Network. These advertisers pay Google fees ranging from 32% to 40%, according to the WSJ.
The rates are in line with Google’s public statements that publishers receive 68% of revenue from AdSense, a way for publishers to earn money from their online content.