Google tried to get around monopoly complaints with secret program codenamed ‘Jedi’
Google launched a project codenamed ‘Jedi’ as its digital advertising business came under threat, a court heard.
Executives at the tech titan knew internet publishers were keen to ‘keep Google at bay’ by using a new way to sell adverts, according to internal emails.
Private concerns were expressed by those executives that Jedi would be seen as ‘nefarious’ and ‘self-serving’ but it went ahead.
The revelations came on the fourth day of an antitrust trial brought against Google by the U.S. Department of Justice (DOJ).
Government lawyers allege Google controlled the market for display advertising on the internet, including on news websites, and engaged in monopolistic and anti-competitive behavior. The tech giant denies the allegations.
Executives at the tech titan knew internet publishers were keen to ‘keep Google at bay’ by using a new way to sell adverts, according to internal emails
Websites show around 13 billion display adverts every day.
Google owns the technology tool used by most publishers to sell advertising space on their sites.
It also owns the main system used by advertisers to buy that space.
And it runs the biggest exchange where instant auctions are held to buy and sell the adverts.
The exchange, AdX, takes a 20 percent cut of each advertising dollar.
The complex case is being heard in a federal court in Alexandria, Virginia by Judge Leonie Brinkema, without a jury.
DOJ officials want the judge to force Google to sell off part of its business and, at one point in proceedings, she asked a witness what would happen if the tech giant’s display advertising arm was ‘blown apart’.
The witness, Jed Dederick, chief revenue officer for The Trade Desk, a competing advertising platform, said publishers would not let ad space ‘go unsold’.
Dederick also told the court that in negotiating with Google ‘they’ve been draconian and absolutist in accepting our feedback.’
It was ‘impossible to say no’ to implementing Google products ‘unless you’re (the size of) Disney,’ he said.
The court heard how the emergence of a new ad sales system called header bidding (HB), around 2016 had made publishers less reliant on Google.
But in response Google launched ‘Jedi,’ which was known publicly as Exchange Bidding.
Emails between various Google executives showed they wanted to ‘dry out’ HB, which was ‘undermining the value of (Google products) as a must-call platform.’
It was ‘rational’ for publishers to ‘want to diversify their sources of income. It helps them to keep Google at bay and put pressure on us (similar to any industry),’ one executive wrote.
Another noted how some publishers were even ‘willing to tolerate revenue loss in exchange for a reduced reliance’ on Google.
A ‘highly confidential’ July 2018 report outlined ‘Jedi’ said the strategy was to ‘improve auctions and increase net revenue.’
It added that ‘stopping header bidding’ may not be ‘feasible’.
The plan would make complex changes to the instantaneous auction system for display ads.
There were internal concerns about Jedi, including that it would be ‘viewed as pure loss of functionality that Google is doing for their own (perceived nefarious, self-serving reasons).’
One Google executive said there was a ‘weird and unorthodox cascade of auctions for Jedi publishers.’
An audio recording of an April 2019 meeting between a Google product manager and representatives of 40 publishers was played to the court.
In it a representative from a news website said: ‘You have made it next to impossible for any of us to figure out how to increase our yield with partners outside of Google.’
She added ‘Isn’t that a monopoly?’ and ‘It seems to me this was all built for HB not to exist.’
A Google executive later said in an email that pushback from publishers ‘looks serious’.
Lawyers for Google showed the court documents saying that, after the meeting, the tech giant had carried out ‘extensive partner education’.
There had been consultation with 400 publishers and feedback had been incorporated into their products, the documents said.