Internal Google documents made public during the company's ongoing antitrust trial have laid bare the company's efforts to maintain its dominance in the digital advertising industry through exclusive deals and consolidation of its ad tech business.
Marketing Brew Reports On the seventh day of Google's antitrust trial, some internal Google documents were made public that the Department of Justice claims bolster its claims that the company unfairly tied up its ad tech business to maintain an industry monopoly. The documents revealed that Google employees knew that AdX, the company's publisher ad exchange, relied heavily on Google's exclusive access to advertisers to maintain its market dominance.
In an internal memo discussing the benefits of opening up its ad inventory to third parties, a Google employee expressed concern that if AdX lost its exclusivity to Google's advertisers, “many publishers would end their relationships with AdX in favor of their preferred vendors.” The revelation underscores how important advertiser exclusivity is to Google's strategy for maintaining its market position. Internal emails previously released in court show that squashing the competition was crucial to Google executives.
Further evidence presented in court showed that Google's own buy-side tools were considered weaker because they were exclusive to the company's AdX. Internal conversations revealed Google employees suggesting that the company's buy-side was “subsidizing” the sell-side, which “significantly weakened GDN's position in the market.” GDN, or Google Display Network, refers to Google's display advertising business.
The extent to which Google relies on exclusivity deals was made clear by an internal simulation in 2014, which showed that the company's revenue would fall by 70% if its ad network did not bid for AdX inventory.
To get around Google's dominance, publishers turned to header bidding, an open-source technology that gave them access to multiple ad exchanges. The Justice Department previously revealed that Google executive Chris LaSala viewed header bidding as an “existential threat” in a 2016 email. Google allegedly considered a proposal to “starve” publishers that adopted header bidding technology, but the proposal never went ahead. The company also considered building a firewall between its buy-side and sell-side businesses to legitimize AdX as a platform, but Nirmal Jayaram, a senior director of engineering at Google, testified that he was not aware of any formal firewalls being put in place.
As the trial continues, the Justice Department is trying to prove that Google's exclusivity agreements and ties to its ad tech business amounted to anticompetitive practices that allowed the company to maintain a dominant position in the digital advertising industry. Internal documents filed in court offer a glimpse into Google's strategy and concerns raised by employees about the company's market power.
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Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship.
