A recap of week one of US v. Google II

With week one of US v. Google II in the books, let's take stock of where things stand, and what's to come.

For most of us (particularly those of us in the courtroom), last week's big moments are as much about revelation as validation. We learned what we all have suspected about all of the times Google definitively knew the perception, effect, and harms of their conduct, and did what they wanted to anyway, because they could.

The DOJ wove together a compelling narrative around the ways in which Google's abuse of dominance across their trifecta of monopolies left publishers with little choice, and even less control:

• Google used its existing search dominance to amass the demand of millions of search advertisers within their ad network.
• Google acquired the dominant ad server and tied it to the ad exchange. Google Ads demand was made exclusive to the AdX exchange, which gave its ad server (f/k/a DFP) exclusive access to real-time pricing information from the exchange.
• Sitting on both sides, Google made unilateral rules that disadvantaged its competitors, harmed its customers, and entrenched its dominance, all the while extracting monopoly rents.

Revelations and receipts

More detail can be found in my daily updates from the trial. But here are some key moments from last week, with receipts (aka Trial Exhibits).

1. Google knew they were overcharging but why lower prices if you don't have to? See: PTX0612 (below), PTX0624(below), PTX0864. Google knew that the 20% take rate was about double the market norm, but that they were insulated from price pressure by their AdWords unique demand.

• When publishers found a way to take back control and reduce their dependency via Header Bidding, Google made it their mission to thwart it. See: PTX0444. Google employees openly discussed that Header Bidding was an existential threat.

• Google knew Publishers wanted so badly to get out of the chokehold that they were even willing to lose some revenue in order to regain control.
  See, e.g. PTX1854 - transcript of Google / Publisher partner meeting about bundle of changes: moving to 1st Price Auction, Removing First Look, UPR (April 2019)

Layser's testimony earlier in the week, as I wrote, contained the most poignant moment in the trial thus far about Google's unfair, unilateral decisions. Her testimony, and the below excerpts illuminate the two central themes of the trial: Google's control and their conflicts of interest.

More on conflicts from Eisar Lipkovitz's 2023 deposition:

What's coming next

The DOJ expects to wrap up their side sometime this coming week. This is about half of the three-week timeframe they originally anticipated for this trial. It also reflects the tight ship Judge Brinkema is running.

This week, we'll be hearing from a couple of expert witnesses, a few more industry participants, and at least four Google employees/Xooglers.

1. Monday: Neal Mohan, current YouTube CEO, previously on Ads business, coming over from DoubleClick
2. Tuesday: Nirmal Jayaram, Sr. Director, Engineering
3. Wednesday: Scott Spencer, Xoogler and ex-DoubleClick, former VP of Product Management
4. Thursday: Jonathan Bellack, Xoogler, Director of Project Management
   

Bellack is key to the case

It is quite possible that Bellack will be the DOJ's closing act. That's because Bellack is a long-time employee that had been at DoubleClick since 2004, coming over to Google with the acquisition. He served in many product management-focused roles on the sell-side, including leading the unification of DFP and AdX under GAM. His name has appeared just about daily in emails and documents entered into evidence during the examinations of Xooglers like Eisar Lipkovitz, Brad Bender, and Rahul Srinivasan. (For more on each of these folks, check out our Witness Database.)

1. At the end of 2022, Bellack reportedly told Google that he was looking to leave the company, after nearly 15 years. About two months later, on January 20th, 2023, he was exited. Interestingly, the DOJ's complaint against Google was also filed in January of 2023.
2. He was vocal about leaving, and about the abrupt nature of his departure. As he says in his interview about his exit, he was "aggressively" compensated, and isn't worried about money.
3. Bellack is involved in projects to support local journalism in his home town, and he joined the Applied Social Media Lab at Harvard after leaving Google, where he "is building a team of technologists to invent new social media approaches that center the public interest." In the latter part of his career, he wants to be a "great helper."

He appears unfettered by golden handcuffs, and isn't gagged by contract. But undoubtedly, there are personal loyalties that Bellack still holds. He thanks Neal Mohan (who testifies tomorrow), saying he "never stopped fighting" for him in his blog. Nevertheless, for the above reasons, and given that he seems to be the last Xoogler the DOJ plans to call, this is one I'm awaiting eagerly.

Courtroom vibes

One of the interesting dynamics in the courtroom is how Google appears to be using one of their (many, many) defense team associates to run post-its back and forth to its comms team/spin-factory throughout the day. I've talked before about how control is Google's strategy. Controlling the narrative is a big part of this.

As I watch this play out each day, I am reminded of the critical importance of journalism and public access to information to a healthy market and functioning democracy - exactly what is at stake in this very trial. It is a reminder of why we and our partners created usvgoogleads.com and created resources there to help others do their own analysis and form their own opinions. The public silence the IAB and the ANA about this trial alone speaks volumes about the power Google wields.

It is a reminder each day of why I am incredibly proud to be here on the ground, and to have the opportunity to help keep you all informed. Let's keep all eyes on Google. The future of journalism depends on it.

digital advertising, policy, US-v-Google-II