Google misled publishers and advertisers about the inner workings of its ad auctions, according to newly unredacted allegations in a December 2020 lawsuit brought against the company by state attorneys general.
The complaint reveals Google misled publishers and advertisers for years about the pricing and processes of its ad auctions, creating secret programs that deflated sales for some companies while increasing prices for buyers.
The company “pocketed the difference between what it told publishers and advertisers that an ad cost and used the pool of money to manipulate future auctions to expand its digital monopoly," reports The Wall Street Journal. “The documents cite internal correspondence in which Google employees said some of these practices amounted to growing its business through ‘insider information.’”
The unredacted filing in the The U.S. District Court of the Southern District for New York, released Friday, came after a federal judge ruled this week that an amended complaint filed last year could be unsealed.
Google told the WSJ that the lawsuit is "full of inaccuracies and lacks legal merit" and says it intends to file a motion to dismiss it next week.
The suit brought about in December 2020 charges Google with inflating ad costs suppressing competition from rival exchanges, limiting options for ad delivery. Texas Attorney General Ken Paxton leads the multistate lawsuit against Google, accusing the search engine of taking illegal actions to hurt competition in the advertising technology market.
It also alleges that Google suppressed competition from rival exchanges and limited website options for ad delivery.
The new complaint involves what the State Attorneys are calling an “illegal price-fixing agreement.” It includes information about Google CEO Sundar Pichai, and Meta CEO Mark Zuckerberg. The two signed off on a 2018 business agreement that allegedly guaranteed Meta’s subsidiary Facebook would bid and win a fixed percentage of ad auctions.
The agreement was signed by Google Chief Business Officer Philipp Schindler and Facebook Chief Operating Officer Sheryl Sandberg.