Going Once, Going Twice: Google's Millisecond Ad Auctions are the Focus of Monopoly Claim

upstart writes:

Google says it no longer auctions off ad space in the ways alleged:

A trial under way in federal court in Alexandria, Virginia, will determine if Google's ad tech stack constitutes an illegal monopoly. The first week has included a deep dive into exactly how Google's products work together to conduct behind-the-scenes electronic auctions that place ads in front of consumers in the blink of an eye.

Online advertising has rapidly evolved. Fifteen or so years ago, if you saw an internet display ad, there was a pretty good chance it featured people dancing over their enthusiasm for low mortgage rates, and those ads were foisted on you whether you were looking at real estate or searching for baseball scores.

Now, the algorithms that match ads to your interests are carefully calibrated, sometimes to an almost creepy extent.

Google, for its part, says it has invested billions of dollars to improve the quality of ads that consumers see, and ensure that advertisers can reach the consumers they're seeking.

The Justice Department contends that what Google has also done over the years is rig the automated auctions of ad sales to favor itself over other would-be players in the industry, and also deprived the publishing industry of hundreds of millions of dollars it would have received if the auctions were truly competitive.

[...] In the government's depiction, there are three distinct tools that interact to sell an ad and place it in front of a consumer. There's the ad servers used by publishers to sell space on their websites, particularly the rectangular ads that appear on the top and right-hand side of a web page. Ad networks are used by advertisers to buy ad space across an array of relevant websites.

And in between is the ad exchange, which matches the website publisher to the would-be advertiser by hosting an instant auction.

[...] For years, Google gave its ad exchange, called AdX, the first chance to match a publisher's proposed floor price. For instance, if a publisher wanted to sell a specific ad impression for a minimum of 50 cents, Google's software would give its own ad exchange the first chance to purchase. If Google's ad exchange bid 50 cents, it would win the auction, even if competing ad exchanges down the line were willing to pay more.

Google said the system was necessary to ensure ads loaded quickly. If the computers entertained bids from every ad exchange, it would take too long.

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