• by Tony Silber , January 14, 2022

Google misled publishers and advertisers for years, in effect, running rigged ad auctions, according to newly unredacted filings that are part of a 13-month-old lawsuit led by 10 states.

A report Friday in the Wall Street Journal said the unredacted information, filed in the U.S. District Court for the Southern District of New York, alleges Google created secret programs for manipulating the pricing and processes of its ad auctions, deflating sales for some companies while increasing prices for buyers.

Google would then pocket the difference between what it told buyers and sellers an ad cost, and use the pool of money to manipulate future auctions and expand its digital monopoly, the newly unredacted complaint alleges, per the WSJ.

The documents said, citing internal correspondence, Google was increasing revenue in what amounted to “insider information.”

The lawsuit was first filed in December 2020, with 10 states, led by Texas Attorney General Ken Paxton, alleging Google was running a monopolistic advertising business and at one point, enlisting Facebook in an arrangement where Facebook would dial back certain competitive moves in exchange for preferred treatment in Google ad auctions.

Google has unrivaled influence in how digital advertising is bought and sold. Not only does it run its own advertising business, which produced $147 billion in 2020 and $53 billion in the third quarter of 2021 alone, but it has a dominant position in every step of the process, through its ownership of the ad-serving business formerly known as DoubleClick, which has about 70% of the overall ad-serving market.

The lawsuit and new filings was described by Google as “full of inaccuracies” and lacking in legal merit. It said it would file a motion for dismissal next week. A company spokesman said the online advertising market is characterized by “vigorous competition.”