Google’s Insider Trading Advertising Market: Tech Giant Has a “ Secret Plan ” That Lets Them Use Online Publisher Data to Help Make Companies Using Their Technology Win Ads – And They’ve Made Millions From It
- Google is being sued by ten US states that believe it is violating antitrust laws
- The states say the tech giant has an unfair monopoly on the internet
- A big part of it is advertising, with which Google makes hundreds of millions every year
- Google reaps the benefits of both running an ad marketplace for publishers and using ad-buying technology
- Companies that use Google’s ad technology to buy an ad pay Google a percentage of the transaction if they win
- According to the lawsuit, Google was executing a plan it called Project Bernanke
- It allowed them to see what bids were being accepted, guide their customers to get there and secure that the ad was going to them
- Others were pulled from auctions using various ad-buying tools and made Google $ 230 million in 2013 alone
Google has been accused of conducting “ insider trading ” with its ad systems to give its customers an edge by using publisher data they secretly obtained to help them place winning ad bids.
The allegation is part of an antitrust lawsuit filed by Texas prosecutors and nine other states against the Silicon Valley giant. Papers were filed this week as part of the lawsuit that was not filed and then redacted and sealed by a judge.
The papers were seen through The Wall Street Journal before they were edited. They claim that Google ran a secret program that allowed them to play both sides of the industry.
Central to this is understanding how Google has unprecedented and unparalleled access to both ad sellers and ad buyers.
Online publishers such as media outlets use Google technology to sell their ads. The technology is known as the DoubleClick Ad Exchange or AdX.
It gives Google access to information about how much they charge for those ads, how often they are sold, who they are sold to and, crucially, how much advertisers are willing to pay at auctions for a coveted ad spot, such as an ad exchange. or marketplace.
Google is being sued by ten states in lawsuit filed by Texas alleging it violated antitrust laws
Online advertisers also use Google technology to buy those ads.
There are two Google ad buying tools; DV360 and Google Ads. Every time an ad is bought with it, Google gets a bribe.
According to the lawsuit, Google took the information from AdX and used it to guide the companies in using the tools to help them place winning ad bids.
Google named it Project Bernanke, and it earned them $ 230 million in 2013 alone, according to the filing. Publishers are not notified when they have signed up to use AdX.
It is unclear why they called the project that. Ben Bernanke was Chairman of the Federal Reserve for two terms.
The lawsuit also details a secret deal that Google and Facebook had a secret deal that allowed Facebook to bid and win a certain number of ad auctions.
Google dominates on both sides of the online advertising industry. Publishers use Google Ad Exchange (AdX) to auction their ads. It gives Google access to their ad sales data. Businesses also use Google Ads to buy the ads on Google AdX and every time a transaction expires Google gets a bribe
The deal was known as Jedi Blue. Details of this emerged in the December 2019 lawsuit.
Both Google and Facebook said at the time that they were not doing anything wrong.
The new documents show that Google admitted to making “commercially reasonable efforts” to get ads to Facebook instead of competitors.
As part of Jedi Blue, Facebook has committed to spend at least $ 500 million in one year, according to the documents.
Top executives at every company knew about it, including Sheryl Sandberg – COO of Facebook – and Philip Schindler, Google’s senior vice president and chief business officer.
Google also insisted in response to the ‘insider trading’ allegations that it acted overboard.
It claims the lawsuit does not understand the online advertising industry.
[It] misrepresents many aspects of our ad technology business. We look forward to taking our case to court, ”Peter Schottenfels, a Google spokesperson, told the Wall Street Journal.