Details of measures 'Jedi Blue' and 'Project NERA' for Google to monopolize the Internet advertising market revealed



On Friday, October 22, 2021, Google was

re-filed by Texas Attorney General Ken Paxton for antitrust violations. A 173-page amendment complaint filed by Justice Secretary Paxton and others in the United States District Court for the Southern District of New York (PDF file) reveals a number of fraudulent acts Google has committed on Internet advertising. -Patrick McGee , a reporter for the Financial Times , and Amos , a programmer, have summarized the details.





◆ 'Dynamic Allocation' that abuses the superiority of Google's ad exchange
Google's Ad Exchange (AdX) process processes 11 billion inventory per day. In this regard, Google boasts that 'there are more transactions per day on AdX than the total number of transactions on the New York Stock Exchange and Nasdaq.'

Google is not a distributor in the Internet advertising business. Google is the largest seller and buyer in the advertising business. As a result, the amended complaint states that 'Google is a pitcher, a batter, and a referee,' pointing out that it plays too many roles in forming a fair deal. In addition, a senior Google employee said of the company's advertising business, 'It's like Goldman Sachs or Citibank owning the New York Stock Exchange. For that matter, the stock exchange is the New York Stock Exchange. What if there was only one place? ', Admitting that Google is in a state of dominance in Internet advertising.

Google has launched a program called 'Dynamic Allocation' to maximize publisher revenue. However, the complaint claims that the program was 'at the expense of the best interests for the publisher, but at the expense of the best advertising inventory for the publisher.'

In AdX, it was also revealed that Google was tampering with the system so that it could win even if it was not the highest bidder. It has also been pointed out that many employees inside Google are aware of this fact, saying, 'If Google says that any specification change will reduce the profitability of advertising, please run away. Google says Everything is a lie, 'Amos points out.

In the amended complaint, 'Google can operate advertising bids by small businesses (advertisers) such as town doctors from one price to another, without disclosing it to the advertiser. By manipulating prices, we allow our platform to provide the most valuable impressions for publishers, even if non-Google advertisers win the auction. '



◆ 'Jedi' program devised to counter header bidding
Header bidding was devised to counter Google's market monopoly. This means that publishers distribute their inventory to multiple ad systems, solicit the highest bids, and sell their inventory there. In 2016, 70% of the major American online publishers adopted header bidding.

The countermeasure taken by Google against this is a program called 'Jedi'. Google described 'Jedi' as 'a program that produces yields that are not optimal for publishers, so there is a serious risk of being criticized by the media if it is released to the outside,' so users It is clear that the program is not welcomed by customers. Specifically, what they are doing with 'Jedi' is 'to reduce only Google's fee in AdX to zero'.



◆ 'Jedi Blue' which expanded the 'Jedi' program to a collusion with Facebook
Then, in March 2017, Facebook announced that it would adopt header bidding for its advertising business. Google immediately signed a secret contract with Facebook, 'Jedi Blue.' 'Google knew that this'Jedi Blue'was an illegal contract, so we were putting together a way to cover each other if someone knew about the contract,' the amended complaint said. doing.

'It's clear that Google wanted to crush the header bid in this deal,' said a Facebook executive who was offered a 'Jedi Blue' deal by Google to prevent Facebook from focusing on header bids. I admit that the contract was 'Jedi Blue'. 'Jedi Blue' is a contract between Facebook and Google to increase the frequency with which Facebook can win bids in ad space auctions. The amended complaint criticizes the collusion of the two companies, saying, 'Facebook literally operated the auction by setting the frequency of bidding / winning bids and the minimum amount.'



◆ 'Project NERA' to turn the web into a 'unowned but operated' walled garden

The core of 'Project NERA' is the specification that requires login, which was implemented in Chrome, a web browser developed by Google, from September 2018.

The amended complaint states, 'In order for publishers to give Google exclusive access to ad inventory, Google offers publishers a detrimental scenario. Google owns Chrome, the most popular web browser on the market. Taking advantage of what we are doing, we tried to target and track publisher customers to sell Google's advertising inventory. To achieve this, Google first introduced the ability for users to log in to Chrome. First introduced a login feature in Chrome and then used deceptive and coercive tactics to force users to log in. For example, Google automatically when users log in to its services such as Gmail and YouTube. We've changed the specification to log in to Chrome, and when a user tries to log out of Chrome, Google punishes them to log out of the Google product they're using. By allowing users to track Chrome using the deceptive pattern of, we were tracking users on the open web. ' Points out that it was to track users.



◆ Removed the header bidding function that AMP also wants to speed up page loading.
'AMP ' is a framework developed by Google to make the Internet experience on mobile devices faster and more comfortable. After removing the header bidding feature from AMP, Google advertised to publishers that 'using AMP will speed up page loading.' However, Google employees pointed out that 'AMP only improves median performance and does not speed up page display compared to similar technologies offered by other companies.' ..



◆ Fees collected by Google's advertising-related tools such as Google Ad Manager
Currently, Google offers an integrated ad management platform, Google Ad Manager, which dominates the publisher ad server market. Google Ad Manager is said to control more than 90% of the competitive product market in the United States. Google collects 19-22% of the transaction amount as a usage fee for Google Ad Manager, which is said to be an 'exorbitantly high fee' equivalent to 2 to 4 times the average of the publisher advertising server market. Therefore, the amended complaint is 'exponentially higher than the fees for similar services on advertising exchanges,' he said. In addition, the amended complaint also points out that 'Google Display Network' collects 32-40% of the transaction amount as a commission.

That's why Google says, 'Advertising exchanges shouldn't be hugely profitable businesses. They should be like public goods to facilitate buyers and sellers.' It seems that some people are skeptical about the fee.

In addition, Google's share in the mobile application network market is eight times that of the competing service Facebook Audience Network , according to Google's internal materials.



In addition, when Google routes inventory to non-Google ad exchanges, non-Google ad exchanges place inventory on Google services, even though 5% of the transaction amount is charged as a commission. When routing, it is clear that we charge 10% of the transaction amount as a fee.

In addition, experts have described switching of advertising servers as 'like switching engines on an aircraft in flight', and explained that 'the current situation is that publishers cannot switch advertising servers in the Internet advertising market.' I am. In fact, it has been pointed out that AdX had a 60% share of display advertising.

Since it is difficult to switch advertising servers, it seems that even if competing platforms reduced commissions, they did not gain significant market share. In 2016, Google executives revealed that they made an arrogant statement about why the company's platform charges exorbitantly high fees, saying 'I'm doing it because I can.'



In addition, Google used the huge power in the Internet advertising market and collected advertising expenses (22-42%) that should flow to content creators such as innumerable online publishers and online news papers as platform usage fees. The amended complaint points out.

In addition, as of 2009, when Yahoo hit a number of 9 billion ad impressions per day, Google's ad impressions were only about 200 million, and at this time it was still an ad exchange or ad server. The current Google monopoly composition in the market has not been established, and the amended complaint states that 'the market was competitive.'

Related Posts:

in Web Service, Posted by logu_ii