Google allegedly misled publishers and advertisers for years about the pricing and processes of its ad auctions, creating secret programs that deflated sales for some companies while increasing prices for buyers, a newly unredacted complaint says
by Google Chief Business Officer Philipp Schindler and Facebook Chief Operating Officer Sheryl Sandberg.
In the first version, Google misled publishers and advertisers to believe they were participating in a “second-price auction,” where the winner pays the price of the second-highest bid, when using its advertising exchange, AdX, according to allegations from the complaint. However, under Google’s Bernanke program, AdX would at times knock out the second-highest bid, allowing the third-highest bid to win, thus depriving the publisher of revenue, according to the complaint.
A second version of the program, dubbed Global Bernanke, used the pool of money Google gathered to inflate only the bids belonging to Google’s ad-buying tool for small advertisers, originally known as AdWords and now called Google Ads, when these bids were poised to otherwise lose auctions on Google’s exchange, the complaint alleges.
In the Reserve Price Optimization program, Google used historical data about an advertiser’s previous bids to set “floors,” or minimum prices, for that advertiser that resulted in advertisers paying higher prices, the complaint alleges. In one newly unredacted company communication, Google employees said that the program should be based on “smarts and tech” rather than “insider information.”
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