Author Archives: Adam Cohen

AG Paxton’s false claims still don’t add up

Today we’re filing a motion asking the court to dismiss Texas Attorney General Ken Paxton’s antitrust lawsuit over our advertising technology (“ad tech”) business.

This lawsuit has now been rewritten three times. With each version, AG Paxton follows the same pattern: make inaccurate and inflammatory allegations, publicize them widely, and repeat. This playbook may generate attention, but it doesn’t make for a credible antitrust lawsuit.

AG Paxton's allegations are more heat than light, and we don't believe they meet the legal standard to send this case to trial. The complaint misrepresents our business, products and motives, and we are moving to dismiss it based on its failure to offer plausible antitrust claims.

Why this lawsuit misses the law and the facts

At its heart, AG Paxton is asking the court to force us to share user data and design our products in a way that helps our competitors rather than our customers or consumers. But American antitrust law doesn’t require companies to give information to, or design products specifically for, rivals. This lawsuit fails to acknowledge that ad tech is a highly dynamic industry with countless competitors. It’s been recognized that competition in ad tech has led to reduced fees, encouraged new entry, led to increased investment and expanded options for advertisers and publishers alike.

Correcting AG Paxton’s false and misleading allegations

AG Paxton overlooks, or misstates, a litany of clear facts. We want to publicly and unequivocally refute the more egregious allegations:

  • We don’t force “tying”: A central allegation in AG Paxton’s lawsuit is that publishers are forced to use our ad server in order to access our ad exchange. This allegation is simply wrong, and AG Paxton offers no evidence to prove otherwise. If a publisher wants to use our ad exchange with a different ad server, they are free to do so.
  • Header bidding is thriving: A core claim is that we prevented rivals from using a technology, header bidding, through our Open Bidding program. But again, the facts don’t support that. Since we launched Open Bidding, header bidding’s popularity has continued to grow. Recent surveys show a vast majority of publishers currently use header bidding. We simply haven’t held header bidding back.
  • Our auctions are fair: The complaint uses deliberately inflammatory rhetoric to accuse us of a litany of wrongdoings: “misleading” publishers, “rigging” auctions through special data access, running “third price auctions,” “pocketing the difference.” But quite simply, we have – provably – done none of these things. AG Paxton is distorting various optimizations that we have created to improve publisher yields and returns for advertisers. To be clear, contrary to his claims, these optimizations did not and do not result in Google “pocketing” additional revenue share and do not make auctions unfair. And our auction was always a second price auction (until 2019 when it became a first price auction).
  • Out-of-date claims: And more broadly, much of AG Paxton's lawsuit is based on out-dated information that bears no correlation to our current products or business in this dynamic industry (and in any event never amounted to a violation of antitrust laws).

Facebook Audience Network’s participation in Open Bidding

The allegation that has generated the most attention is that we somehow “colluded” with Facebook Audience Network (FAN) through our Open Bidding agreement. That’s simply not true.

To set the record straight, we are today including the full text of our agreement with FAN in our motion to the court. Here are some facts that contradict AG Paxton's claims:

  • This is far from a secret deal: We announced FAN’s participation as one of over 25 partners in our Open Bidding program, all of whom have signed their own agreements to participate.
  • This is a procompetitive agreement: FAN’s participation benefits advertisers because it gives them additional ways to reach their desired audiences. And it benefits publishers because it introduces additional bidders to compete for their ad space, earning them higher returns. In fact, if FAN weren’t a part of Open Bidding, AG Paxton may have claimed we were preventing a rival from accessing our products and depriving publishers of additional revenue.
  • FAN’s involvement is not exclusive: The agreement doesn’t prevent FAN from participating in header bidding or other competing auctions. In fact, FAN participates in several similar auctions on rival platforms. The agreement also doesn’t prevent FAN from building a competing product. Our agreement explicitly states that FAN’s participation is not exclusive (and nowhere in our agreement is header bidding even mentioned). And the entire Open Bidding program (of which Facebook is one of 25 participants) accounts for a small fraction of the display ads we place.
  • We do not manipulate the auction: Finally, this agreement does not provide FAN with an advantage in the Open Bidding auction. FAN competes in the auction just like other bidders: FAN must make the highest bid to win a given impression, period. If another eligible network or exchange bids higher, they win the auction. We don’t allocate ad space to FAN, they don’t receive speed advantages, and we don’t guarantee that they win any auctions.

Our advertising technology helps fund digital content that benefits everyone, and it supports thousands of businesses, from small advertisers to major publishers. Our work in this space is designed to balance and support the needs of publishers, advertisers and consumers.

We’re confident that this case is wrong on the facts and the law, and should be dismissed. However, if it does move forward, we’ll continue to vigorously defend ourselves.

AG Paxton’s misleading attack on our ad tech business

In December, Texas Attorney General Paxton filed a complaint about our ad tech business and hired contingency-fee plaintiff lawyers to handle the case. We look forward to showing in court why AG Paxton’s allegations are wrong. But given some of the misleading claims that have been circulating—in particular, the inaccurate portrayal of our well-publicized “Open Bidding” agreement with Facebook—we wanted to set the record straight.  

About our ad services 

Ad tech helps websites and apps make money and fund high-quality content. It also helps our advertising partners—most of whom are small merchants—reach customers and grow their businesses.  

AG Paxton tries to paint Google’s involvement in this industry as nefarious. The opposite is true. Unlike some B2B companies in this space, a consumer internet company like Google has an incentive to maintain a positive user experience and a sustainable internet that works for all—consumers, advertisers and publishers.

For example, as we’ve built our ad tech products, we have given people granular controls over how their information is used to personalize ads and limited the sharing of personal data to safeguard people’s privacy. We’ve invested in detecting and blocking harmful ads that violate our policies. We also build tools that load content and ads faster; block scammy ad experiences like pop-ups; and reduce the number of intrusive, annoying ads through innovations like skippable ads. Those tools not only help people, but by building trust, promote the sustainability of the free and open internet. 

We’ve worked to be open and upfront with the industry about the improvements we make to our technologies. We try to do the right thing as we balance the concerns of publishers, advertisers, and the people who use our services. Our ad tech rivals and large partners may not always like every decision we make—we’re never going to be able to please everybody. But that’s hardly evidence of wrongdoing and certainly not a credible basis for an antitrust lawsuit.

Here are just a few of the things AG Paxton’s complaint gets wrong:

Myth: Google “dominates the online advertising landscape for image-based web display ads.”
Fact: The ad tech industry is incredibly crowded and competitive.

Competition in online advertising has made ads more affordable and relevant, reduced ad tech fees, and expanded options for publishers and advertisers.

The online advertising space is famously crowded. We compete with household names like Adobe, Amazon, AT&T, Comcast, Facebook, Oracle, Twitter and Verizon. Facebook, for example, is the largest seller of display ads and Amazon last month surpassed us as the preferred ad buying platform for advertisers. We compete fiercely with those companies and others such as Mediaocean, Amobee, MediaMath, Centro, Magnite, The Trade Desk, Index Exchange, OpenX, PubMatic and countless more. A growing number of retail brands such as Walmart, Walgreens, Best Buy, Kroger and Target are also offering their own ad tech.

Myth: Google “extracts a very high ... percent of the ad dollars otherwise flowing to online publishers.”
Fact: Our fees are actually lower than reported industry averages.

Our ad tech fees are lower than reported industry averages. Publishers keep about 70 percent of the revenue when using our products, and for some types of advertising, publishers keep even more—that’s more money in publishers’ pockets to fund their creation of high-quality content.

Myth: We created an alternative to header bidding that “secretly stacks the deck in Google’s favor.”
Fact: We created Open Bidding to address the drawbacks of header bidding.

Header bidding refers to running an auction among multiple ad exchanges for given ad space. You won’t read this in AG Paxton’s complaint, but the technology has real drawbacks: Header bidding auctions take place within the browser, on your computer or mobile phone, so they require the device to use more data in order to work. This can lead to problems like webpages taking longer to load and device batteries draining faster. And the multilayered complexity of header bidding can lead to fraud and other problems that can artificially increase prices for advertisers, as well as billing discrepancies that can hurt publisher revenue.

So we created an alternative to header bidding, called Open Bidding, which runs within the ad server instead of on your device. This solves many of the problems associated with header bidding. Open Bidding provides publishers access to demand from dozens of networks and exchanges. This helps increase demand for publisher inventory and competition for ad space, which enables publishers to drive more revenue. In fact, our data shows that publishers who decide to use Open Bidding on Ad Manager typically see double-digit revenue increases across our partners and exchange—and they can measure this for themselves. 

Additionally, our publisher platform has always integrated with header bidding, so publishers have the choice to use their preferred bidding solution. Publishers can and do bring bids from non-Google header bidding tools into our platform.

Since we launched Open Bidding, traditional header bidding has continued to grow. In fact, a recent survey shows about 90 percent of publishers currently use header bidding for desktop and 60 percent use header bidding for mobile in-app or in-stream video. Amazon also launched an entirely new competitive header bidding solution, which uses the same server-side approach that we do. Header bidding is an evolving and growing space—and now, as a result of our work, there are alternatives to header bidding that improve the user experience.

Myth: Our Open Bidding agreement with Facebook harms publishers.
Fact: Facebook is one of over 25 partners in Open Bidding, and their participation actually helps publishers.

AG Paxton also makes misleading claims about Facebook’s participation in our Open Bidding program.  Facebook Audience Network (FAN)’s involvement isn’t a secret. In fact, it was well-publicized and FAN is one of over 25 partners participating in Open Bidding. Our agreement with FAN simply enables them (and the advertisers they represent) to participate in Open Bidding. Of course we want FAN to participate because the whole goal of Open Bidding is to work with a range of ad networks and exchanges to increase demand for publishers’ ad space, which helps those publishers earn more revenue. FAN’s participation helps that. But to be clear, Open Bidding is still an extremely small part of our ad tech business, accounting for less than 4 percent of the display ads we place.

AG Paxton inaccurately claims that we manipulate the Open Bidding auction in FAN’s favor. We absolutely don’t. FAN must make the highest bid to win a given impression. If another eligible network or exchange bids higher, they win the auction. FAN’s participation in Open Bidding doesn't prevent Facebook from participating in header bidding or any other similar system. In fact, FAN participates in several similar auctions on rival platforms.

And AG Paxton’s claims about how much we charge other Open Bidding partners are mistaken—our standard revenue share for Open Bidding is 5-10 percent.

Myth: AMP was designed to hurt header bidding.
Fact: AMP was designed in partnership with publishers to improve the mobile web.

AG Paxton’s claims about AMP and header bidding are just false. Engineers at Google designed AMP in partnership with publishers and other tech companies to help webpages load faster and improve the user experience on mobile devices—not to harm header bidding.

AMP supports a range of monetization options, including header bidding. Publishers are free to use both AMP and header bidding technologies together if they choose. The use of header bidding doesn’t factor into publisher search rankings. 

Myth: We force partners to use Google tools.
Fact: Partners can readily use our tools and other technologies side by side. 

This claim isn’t accurate either. Publishers and advertisers often use multiple technologies simultaneously. In fact, surveys show the average large publisher uses six different platforms to sell ads on its site, and plans to use even more this year. And the top 100 advertisers use an average of four or more platforms to buy ads.

All of this is why we build our technologies to be interoperable with more than 700 rival platforms for advertisers and 80 rival platforms for publishers.

AG Paxton’s complaint talks about the idea that we offer tools for both advertisers and publishers as if that’s unusual or problematic. But that reflects a lack of knowledge of the online ads industry, where serving both advertisers and publishers is actually commonplace. Many firms with competing ad tech businesses, such as AT&T, Amazon, Twitter, Verizon, Comcast and others, offer ad platforms and tools like ours that cater to both advertisers and publishers. We don’t require either advertisers or publishers to use our whole “stack,” and many don’t. Ultimately, advertisers and publishers can choose what works best for their needs.

Myth: “Google uses privacy concerns to advantage itself.”
Fact: Consumers expect us to secure their data—and we do.

AG Paxton misrepresents our privacy initiatives. We're committed to operating our advertising business in a way that gives people transparency into and control over how their data is used. Consumers also increasingly expect, and data privacy laws require, strict controls over ad tracking tools like cookies and ad identifiers. So we’re focused on meeting those expectations and requirements. As we do so, we’ve created privacy-protecting solutions that enable other ad tech companies to continue to operate and introduced an open and collaborative industry initiative called the Privacy Sandbox, which is working on alternatives to cookies that preserve privacy while protecting free content. Other web browsers have likewise taken similar steps to limit the use of cookies and protect user privacy.

More information

There are many other things this complaint simply gets wrong. You can read more about our ad tech business by visiting our competition website.

We look forward to defending ourselves in court. In the meantime, we’ll continue our work to help publishers and advertisers grow with digital ads and create a sustainable advertising industry that supports free content for everyone.

Redesigning Search would harm American consumers and businesses

Our response to today’s lawsuit about the design of Google Search by state attorneys general:

Google Search is designed to provide you with the most relevant results. We know that if you don’t like the results we’re giving you, you have numerous alternatives—including Amazon, Expedia, Tripadvisor and many others just a click away.

So we keep working to improve our results, designing and rolling out helpful features in Search—including maps, links to products and services you can buy directly, flight and hotel options, and local business information like hours of operation and delivery services.

Look at how our search results have evolved and improved over the years. This is what our search results looked like in 2000—10 blue links, but no other useful features:

Search results page for bread in 2000 showing 10 blue links

And this is what they look like today—more useful information, more direct connections to businesses, more links to websites. Our rigorous testing tells us that you far prefer these types of rich results.

GIF showing a search result for bread on Google in 2020 with rich results

Other search engines like Microsoft’s Bing seem to have heard the same feedback because they have also evolved to provide these kinds of direct results.

Search for Bread on Microsoft Bing in 2020

To get more specifically to the issues raised in today’s lawsuit: it suggests we shouldn't have worked to make Search better and that we should, in fact, be less useful to you. When you search for local products and services, we show information that helps you connect with businesses directly and helps them reach more customers. This lawsuit demands changes to the design of Google Search, requiring us to prominently feature online middlemen in place of direct connections to businesses.   

Redesigning Google Search this way would harm the quality of your search results. And it would come at the expense of businesses like retailers, restaurants, repair shops, airlines and hotels whose listings in Google help them get discovered, and connect directly with customers. They would have a harder time reaching new customers and competing against big commerce and travel platforms and other aggregators and middlemen. 

The data shows that our local results in Search drive more than 4 billion direct connections for businesses every month (such as visits to businesses’ websites, people calling merchants, getting directions to stores, ordering food from restaurants). 

Even as we have added content and features to our search results, the volume of traffic we send to non-Google sites has increased every year since Search was created. Our search results page, which used to show 10 links, now shows an average of 26 outgoing links on mobile devices. 

We drive billions of visits to sites across the web every day and the volume of traffic we’ve sent to non-Google sites has increased every day since Search was created. On average, local results in Google Search drive more than 4 billion connections for businesses every month. This includes more than 2 billion monthly website clicks, as well as other connections like phone calls, directions, ordering food and making reservations. Each month Google connects people with more than 120 million businesses that don’t have websites.

The claims being made have been closely examined and rejected by regulators and courts around the world, including the U.S. Federal Trade Commission, competition authorities in Brazil, Canada and Taiwan, and courts in the United Kingdom and Germany, who all agreed that our changes are designed to improve your search results. It’s also well established that the most important driver for our search results is the specific query—not your personal data.

A gif showing quotes from regulators: “[Google’s changes to Search] could be seen as providing convenience to users and in line with users’ benefits.” - The Taiwan Fair Trade Commission “Google innovated in order to improve the quality and the experience of Internet searches of users, which is considered pro-competitive conduct.” - The Brazilian Competition Authority (CADE) “[I]t is indisputable that the display of a thumbnail map on the [search engine results page (SERP)] in response to a geographic query indeed enhances the quality of the Google SERP.” - The England and Wales High Court (Chancery Division) In a 5-0 bipartisan decision, the U.S. Federal Trade Commission said our product changes were designed to “improve the quality” of search results and “likely benefited consumers.”  “Google’s changes [in Search] are generally made to improve user experiences.” - Competition Bureau Canada

We know that scrutiny of big companies is important and we’re prepared to answer questions and work through the issues. But this lawsuit seeks to redesign Search in ways that would deprive Americans of helpful information and hurt businesses’ ability to connect directly with customers. We look forward to making that case in court, while remaining focused on delivering a high-quality search experience for our users. 

The lawsuit also contains allegations that have previously been made about how we distribute Search, and about our advertising technologies. On those topics, you can read our blog post, and see more specifics on our competition site.