1 00:00:02,440 --> 00:00:04,000 Speaker 1: Also media. 2 00:00:05,280 --> 00:00:17,479 Speaker 2: Hello and welcome to Betrofline. I'm your host ed Ze Trones. 3 00:00:20,280 --> 00:00:24,000 Speaker 2: I am joined by Jason Kent, once again, the CEO DCN. 4 00:00:24,320 --> 00:00:27,000 Speaker 2: We'll be telling us more about the first week of 5 00:00:27,120 --> 00:00:30,360 Speaker 2: the Department of Justice versus Google ads. Jason, thank you 6 00:00:30,360 --> 00:00:31,360 Speaker 2: so much for joining. 7 00:00:31,320 --> 00:00:33,160 Speaker 3: Thanks for having me back edm thrilled to be here. 8 00:00:33,479 --> 00:00:36,199 Speaker 2: So what's been happening since we lost spoke? How did 9 00:00:36,200 --> 00:00:36,879 Speaker 2: the first week go? 10 00:00:37,880 --> 00:00:41,199 Speaker 1: It's a blur. I mean, it's an impressive operation. I 11 00:00:41,200 --> 00:00:44,400 Speaker 1: think we talked about how this district is known as 12 00:00:44,440 --> 00:00:47,520 Speaker 1: the Rocket Docket and that's how they got from from 13 00:00:47,520 --> 00:00:49,879 Speaker 1: filing a complaint to actual trial in like a year 14 00:00:49,880 --> 00:00:52,400 Speaker 1: and a half. So it has that reputation and you 15 00:00:52,479 --> 00:00:55,080 Speaker 1: kind of we saw it in action this week. I 16 00:00:55,080 --> 00:00:57,680 Speaker 1: mean every day we started at nine am sharp, like 17 00:00:57,800 --> 00:01:01,080 Speaker 1: clockwork until six pm with you know, three or four 18 00:01:01,120 --> 00:01:02,920 Speaker 1: senior executives testified every day. 19 00:01:03,800 --> 00:01:05,040 Speaker 2: And who's testified so far? 20 00:01:06,720 --> 00:01:10,119 Speaker 3: Three or four ex Google employees. We've heard from. 21 00:01:10,160 --> 00:01:14,039 Speaker 1: We've had CEOs of all the major ad tech companies, 22 00:01:15,120 --> 00:01:17,520 Speaker 1: Andrew Casally from Index Exchange see. 23 00:01:17,400 --> 00:01:24,400 Speaker 3: What magnite and Ruba Khan actually it's now called Magnite. 24 00:01:24,440 --> 00:01:26,319 Speaker 3: And then well, else do we hear from? 25 00:01:26,319 --> 00:01:30,120 Speaker 1: We heard two different publishers executives, so we kind of 26 00:01:30,160 --> 00:01:33,639 Speaker 1: gone down the list. We've had one expert witness, computer 27 00:01:33,680 --> 00:01:35,360 Speaker 1: science professor from Carnegie Mellon. 28 00:01:35,600 --> 00:01:39,880 Speaker 2: So and so is this currently the Department of Justices case? Like, 29 00:01:39,920 --> 00:01:42,000 Speaker 2: it's them them laying out that's your case. 30 00:01:42,200 --> 00:01:44,160 Speaker 1: Yeah, yeah, this is what they call their case in 31 00:01:44,240 --> 00:01:46,759 Speaker 1: chief and they'll take probably about I think two weeks 32 00:01:46,760 --> 00:01:48,720 Speaker 1: and then Google have a chance to defend itself. 33 00:01:49,120 --> 00:01:51,600 Speaker 2: So what's the thrust of their argument other than they 34 00:01:51,640 --> 00:01:52,400 Speaker 2: have a monopoly. 35 00:01:52,960 --> 00:01:55,040 Speaker 1: Well, let's say you know that there are three different 36 00:01:55,080 --> 00:01:58,440 Speaker 1: markets at work here that that they have a monopoly in, 37 00:01:58,600 --> 00:02:00,800 Speaker 1: so you you know, some of the back and forth 38 00:02:00,960 --> 00:02:04,640 Speaker 1: is still Google trying to break that apart and blur 39 00:02:05,360 --> 00:02:07,840 Speaker 1: into one single kind of two side and market they 40 00:02:07,880 --> 00:02:11,959 Speaker 1: call it. But but the Justice Department is their complaint 41 00:02:12,040 --> 00:02:15,280 Speaker 1: is that again that there's three markets. There's the cell side, 42 00:02:15,680 --> 00:02:18,320 Speaker 1: there's the ad exchange, and then there's the buy side. 43 00:02:19,120 --> 00:02:22,360 Speaker 1: Google in their opening statement has already tried to make 44 00:02:22,400 --> 00:02:25,600 Speaker 1: the into one market that's a two sided market, trying 45 00:02:25,600 --> 00:02:29,360 Speaker 1: to lean into a prior Supreme Court decision that involved 46 00:02:29,360 --> 00:02:32,400 Speaker 1: American Express. I don't I don't think they'll have much 47 00:02:32,400 --> 00:02:36,440 Speaker 1: success there. But once you get past proving that there's 48 00:02:36,480 --> 00:02:40,959 Speaker 1: three markets there and that they've got monopoly power in them, 49 00:02:41,440 --> 00:02:44,680 Speaker 1: then it's also a tying argument that they've used one 50 00:02:44,800 --> 00:02:47,040 Speaker 1: of them, one of those to build up and maintain 51 00:02:47,120 --> 00:02:52,160 Speaker 1: market power through through bad conduct to do that. 52 00:02:52,280 --> 00:02:54,880 Speaker 2: So don me if I break me down those three 53 00:02:55,000 --> 00:02:57,840 Speaker 2: parts then and then we can get into the A grade. 54 00:02:58,160 --> 00:03:01,880 Speaker 3: Sure. So the the publisher side, the cell side. 55 00:03:02,400 --> 00:03:05,200 Speaker 1: Google has the product that a lot of people still 56 00:03:05,200 --> 00:03:08,040 Speaker 1: know as as DFP, which came from their Double Double 57 00:03:08,080 --> 00:03:13,720 Speaker 1: Click acquisition. So that's the publisher ad server, and according 58 00:03:13,760 --> 00:03:17,840 Speaker 1: to the Just Department's opening statement, they've got like ninety 59 00:03:17,960 --> 00:03:22,079 Speaker 1: one percent of the market share for the publisher side. 60 00:03:22,480 --> 00:03:24,720 Speaker 2: And a publisher in this case is like a website 61 00:03:24,880 --> 00:03:28,000 Speaker 2: and be like a website the show's Google ads. 62 00:03:27,760 --> 00:03:31,960 Speaker 1: On them exactly, And so that's the server that's it's 63 00:03:32,040 --> 00:03:33,560 Speaker 1: kind of the sort I guess what you call the 64 00:03:33,600 --> 00:03:35,520 Speaker 1: source of truth. We've always called it, but it's the 65 00:03:36,120 --> 00:03:39,400 Speaker 1: it's the ad server that says, hey, I've got this AD, 66 00:03:40,520 --> 00:03:42,880 Speaker 1: and then it takes care of deciding who wins it 67 00:03:42,920 --> 00:03:46,480 Speaker 1: and ultimately rendering and serving the ad and then actually 68 00:03:46,520 --> 00:03:48,760 Speaker 1: dealing with all the accounting. 69 00:03:48,400 --> 00:03:50,280 Speaker 3: And inventory projections, et cetera. 70 00:03:51,280 --> 00:03:54,080 Speaker 1: So that's that's the what's the cell side of the 71 00:03:54,360 --> 00:03:57,680 Speaker 1: of this auction market as real time auction market. And 72 00:03:57,720 --> 00:04:00,160 Speaker 1: then to go to the other side, you've got on 73 00:04:00,200 --> 00:04:05,760 Speaker 1: the buy side. Google has their ad demand that they 74 00:04:05,800 --> 00:04:09,400 Speaker 1: have through their ad network that they also have I 75 00:04:09,440 --> 00:04:11,920 Speaker 1: think the just Department's arguing they have like eighty some 76 00:04:12,040 --> 00:04:17,120 Speaker 1: percent of that market. That's really important because a lot 77 00:04:17,120 --> 00:04:21,080 Speaker 1: of the arguments are that you couldn't use other products 78 00:04:21,080 --> 00:04:22,080 Speaker 1: and still have access to. 79 00:04:22,040 --> 00:04:24,279 Speaker 3: That Google demand, and so they use that. 80 00:04:24,760 --> 00:04:29,040 Speaker 1: Advertising demand of advertisers that want to spend money in 81 00:04:29,200 --> 00:04:33,800 Speaker 1: order to ensure that everyone else stays on their supply chain. 82 00:04:34,279 --> 00:04:38,800 Speaker 1: And then in the middle is the ad exchange which 83 00:04:38,920 --> 00:04:43,839 Speaker 1: Google is called ad X, and that's the exchange that 84 00:04:44,120 --> 00:04:48,080 Speaker 1: acts as the ability to take in bids. 85 00:04:49,200 --> 00:04:51,320 Speaker 3: Of that ad inventory and then clear them. 86 00:04:51,320 --> 00:04:54,720 Speaker 2: And so it's the place where Google sells ads on 87 00:04:54,800 --> 00:04:55,919 Speaker 2: Google to Google. 88 00:04:56,640 --> 00:04:59,800 Speaker 1: No, it's the ad X would be the what would 89 00:04:59,839 --> 00:05:03,839 Speaker 1: take the cell side, So the publisher ad server, so 90 00:05:03,960 --> 00:05:06,360 Speaker 1: all the different websites that are out there across the web, 91 00:05:06,680 --> 00:05:08,960 Speaker 1: they would take their inventory and say hey, I've got 92 00:05:08,960 --> 00:05:12,640 Speaker 1: this ad impression. I'm requesting somebody to bid on it, 93 00:05:13,160 --> 00:05:17,560 Speaker 1: and then Google could handle the bid because of its demand, 94 00:05:17,640 --> 00:05:21,240 Speaker 1: but other parties could come into and bid and they 95 00:05:21,240 --> 00:05:22,560 Speaker 1: would decide the highest bid. 96 00:05:23,640 --> 00:05:26,040 Speaker 2: So how are they using this as a monopolis? Then? 97 00:05:26,080 --> 00:05:29,080 Speaker 2: Where is the other than being on every single transaction? 98 00:05:29,600 --> 00:05:33,600 Speaker 2: Are they doing anything else to basically intervene and drive 99 00:05:33,680 --> 00:05:34,119 Speaker 2: up price? 100 00:05:35,120 --> 00:05:38,480 Speaker 1: Well, I mean, the couple of the main themes that 101 00:05:38,520 --> 00:05:41,040 Speaker 1: are going on throughout the entire week is that that 102 00:05:41,160 --> 00:05:45,479 Speaker 1: ad X, which is the exchange, Google takes twenty percent 103 00:05:46,040 --> 00:05:48,920 Speaker 1: of the revenue and they've never had to come off 104 00:05:48,920 --> 00:05:49,600 Speaker 1: of that price. 105 00:05:50,320 --> 00:05:51,960 Speaker 3: And so. 106 00:05:53,880 --> 00:05:56,760 Speaker 1: Like the CEOs of like index Exchange and these other 107 00:05:56,839 --> 00:06:00,000 Speaker 1: exchanges that are out there were testifying and they charge 108 00:06:00,279 --> 00:06:00,960 Speaker 1: like half of. 109 00:06:00,880 --> 00:06:04,400 Speaker 3: What Google charges, sometimes even as low as five percent. 110 00:06:05,080 --> 00:06:07,479 Speaker 1: Andrew Casally, the CEO of index Exchange, that they actually 111 00:06:07,480 --> 00:06:10,159 Speaker 1: went down to zero and they weren't able to take 112 00:06:10,240 --> 00:06:13,400 Speaker 1: away business from Google. So Google is able to keep 113 00:06:13,440 --> 00:06:18,400 Speaker 1: that twenty percent and extract monopoly rents. According to one 114 00:06:18,440 --> 00:06:21,000 Speaker 1: of their own internal health to give me emails go ahead. 115 00:06:20,760 --> 00:06:23,599 Speaker 2: Forgive my ignorance here. But how do they extra like 116 00:06:23,720 --> 00:06:25,880 Speaker 2: is it that just there's a bunch of ad inventory 117 00:06:25,880 --> 00:06:27,440 Speaker 2: that Google only has access to. 118 00:06:28,160 --> 00:06:31,000 Speaker 3: It's it's the opposite of it. It's actually it's the. 119 00:06:32,720 --> 00:06:38,000 Speaker 1: That you can only have access to the demand, the 120 00:06:38,080 --> 00:06:43,440 Speaker 1: AD spend that Google has if you're using ad X, 121 00:06:44,000 --> 00:06:47,280 Speaker 1: so that AD demand won't travel through any other exchange. 122 00:06:47,800 --> 00:06:48,560 Speaker 2: And why is that? 123 00:06:48,720 --> 00:06:51,760 Speaker 1: Is it just because it's a decision by Google and 124 00:06:51,839 --> 00:06:55,240 Speaker 1: so yeah, so they made the decision to only allow 125 00:06:55,279 --> 00:06:56,839 Speaker 1: their demand to go through ADX. 126 00:06:57,320 --> 00:07:01,680 Speaker 2: So what's stopping people from building their own ad X. 127 00:07:03,160 --> 00:07:05,719 Speaker 1: There's other exchanges out there that try to compete with 128 00:07:05,720 --> 00:07:08,719 Speaker 1: with add x, but they're not able to because they 129 00:07:08,800 --> 00:07:12,320 Speaker 1: can't get access to all the AD demand and that spend. 130 00:07:12,320 --> 00:07:16,960 Speaker 1: It's that critical, and everybody wants to stay on ad X, 131 00:07:17,000 --> 00:07:20,440 Speaker 1: and Google has then advantages which we can. 132 00:07:20,360 --> 00:07:23,640 Speaker 3: Go through because of the way the ad X operates. 133 00:07:23,800 --> 00:07:26,040 Speaker 2: That's one of those advantages. 134 00:07:26,840 --> 00:07:27,280 Speaker 3: Then you know that. 135 00:07:27,360 --> 00:07:30,120 Speaker 1: I think the biggest one that was part of the 136 00:07:30,200 --> 00:07:33,320 Speaker 1: opening statements is what's now last look they call it. 137 00:07:33,640 --> 00:07:36,680 Speaker 1: You know, there was something called first look, which was 138 00:07:36,760 --> 00:07:40,000 Speaker 1: really before a real before the auction's really opened up 139 00:07:40,040 --> 00:07:43,760 Speaker 1: with header bidding, and first looks kind of just the 140 00:07:44,400 --> 00:07:47,360 Speaker 1: simplify It's basically if you put in if a publisher 141 00:07:47,440 --> 00:07:49,960 Speaker 1: said Hey, I've got this ad unit and I'm willing 142 00:07:50,040 --> 00:07:53,080 Speaker 1: to sell it to anybody, and the floor the lowest 143 00:07:53,160 --> 00:07:56,280 Speaker 1: price i'll sell it for is five dollars. Then Google 144 00:07:56,360 --> 00:07:58,480 Speaker 1: always had the chance to say I'll take it before 145 00:07:58,480 --> 00:08:00,680 Speaker 1: it even goes into the auction. They could say they 146 00:08:00,760 --> 00:08:02,880 Speaker 1: had first look, and they could just say I'll take 147 00:08:02,920 --> 00:08:05,800 Speaker 1: it for five dollars and a penny basically before they 148 00:08:05,840 --> 00:08:09,440 Speaker 1: even put it in the auction. And over time that 149 00:08:09,880 --> 00:08:14,400 Speaker 1: transitioned into something called last look, so that when auctions 150 00:08:14,440 --> 00:08:19,760 Speaker 1: started to open up because of their privileged position that 151 00:08:19,880 --> 00:08:23,600 Speaker 1: Google had, they had something called last look, where after 152 00:08:23,840 --> 00:08:26,200 Speaker 1: all the auction took place, they could then look at 153 00:08:26,280 --> 00:08:28,480 Speaker 1: the winning bid and decide if they wanted to beat 154 00:08:28,520 --> 00:08:29,679 Speaker 1: it by another penny. 155 00:08:30,160 --> 00:08:33,120 Speaker 2: Oh, so they can literally just rig the dice pretty 156 00:08:33,200 --> 00:08:34,640 Speaker 2: much as they want. 157 00:08:35,040 --> 00:08:38,360 Speaker 3: Like it. I mean, that's the way it's I mean, 158 00:08:38,400 --> 00:08:39,480 Speaker 3: that's the reading in the room. 159 00:08:39,559 --> 00:08:42,079 Speaker 1: And it's interesting because you know, I think one of 160 00:08:42,080 --> 00:08:45,559 Speaker 1: the biggest questions always going into this trial was, you know, 161 00:08:45,600 --> 00:08:47,480 Speaker 1: it was originally gonna be a jury, now it's a 162 00:08:47,880 --> 00:08:50,319 Speaker 1: this judge bring them a was you know, can you 163 00:08:50,440 --> 00:08:55,360 Speaker 1: explain these live high speed trading auctions of ad tech, 164 00:08:55,960 --> 00:08:59,319 Speaker 1: you know, to the average American, and they're doing a 165 00:08:59,400 --> 00:09:01,679 Speaker 1: really good job explained. I think the judge gets it, 166 00:09:01,760 --> 00:09:04,319 Speaker 1: the people in the room get it, and you know, 167 00:09:04,400 --> 00:09:06,480 Speaker 1: I think Last Look was one of the better examples 168 00:09:06,520 --> 00:09:10,360 Speaker 1: where the Justice Department and their opening statement described it 169 00:09:10,480 --> 00:09:14,679 Speaker 1: as kind of like a classic silent auction where every 170 00:09:14,720 --> 00:09:17,360 Speaker 1: party writes down their bid on the slip of paper. 171 00:09:17,960 --> 00:09:21,520 Speaker 3: It's in a sealed envelope, and you only get to 172 00:09:21,559 --> 00:09:22,040 Speaker 3: bid ones. 173 00:09:22,320 --> 00:09:24,600 Speaker 1: And then at the end of the auction, Google gets 174 00:09:24,640 --> 00:09:27,240 Speaker 1: to peek into the envelope see what the highest bid 175 00:09:27,320 --> 00:09:28,880 Speaker 1: is and say, you know, I'll pay a penny higher. 176 00:09:28,760 --> 00:09:31,640 Speaker 2: For that, And so Google gets the big twice where 177 00:09:31,679 --> 00:09:32,880 Speaker 2: everyone else gets to bid ones. 178 00:09:33,160 --> 00:09:36,000 Speaker 1: Essentially, that's essentially what happens, right, and so they get 179 00:09:36,040 --> 00:09:39,679 Speaker 1: to pick off wherever they think there's additional value because 180 00:09:39,760 --> 00:09:40,920 Speaker 1: of the quality of the impression. 181 00:09:41,360 --> 00:09:44,240 Speaker 2: And this is in the tool that lets you let's 182 00:09:44,280 --> 00:09:46,720 Speaker 2: publish a sell adspace, right, Yeah. 183 00:09:46,600 --> 00:09:48,200 Speaker 3: It's basically what it's called an SSP. 184 00:09:48,360 --> 00:09:52,080 Speaker 1: It's the supply side platform that takes their inventory puts 185 00:09:52,080 --> 00:09:52,760 Speaker 1: it out for auctions. 186 00:10:02,200 --> 00:10:04,720 Speaker 2: So as as you're finding from my litany of very 187 00:10:04,760 --> 00:10:07,640 Speaker 2: simple questions, this stuff is pretty complex. Is the judge 188 00:10:07,679 --> 00:10:08,079 Speaker 2: getting it? 189 00:10:08,920 --> 00:10:09,640 Speaker 3: I think she is. 190 00:10:10,040 --> 00:10:10,240 Speaker 2: Yeah. 191 00:10:10,520 --> 00:10:13,360 Speaker 1: I mean they're you know, they're they're coming up with 192 00:10:13,760 --> 00:10:16,400 Speaker 1: I think, simple ways to explain it. She's she seems 193 00:10:16,600 --> 00:10:19,679 Speaker 1: sharp as attack and she's you know, fair as can be. 194 00:10:19,800 --> 00:10:22,520 Speaker 1: I mean, she runs a court room like I've never seen. 195 00:10:23,480 --> 00:10:26,240 Speaker 1: But the technical aspects of it, I think they're going 196 00:10:26,280 --> 00:10:29,480 Speaker 1: as deep as they really need to. And you know, 197 00:10:29,559 --> 00:10:34,040 Speaker 1: they had an expert witness in Carnegie Mellon computer science 198 00:10:34,120 --> 00:10:37,920 Speaker 1: professor doctor Robbie and he did a really good job 199 00:10:38,040 --> 00:10:41,880 Speaker 1: of of with some visuals of explaining the kind of 200 00:10:41,960 --> 00:10:46,520 Speaker 1: the three or four kind of most important ways in 201 00:10:46,640 --> 00:10:50,600 Speaker 1: which they were quote unquote rigging or allegedly rigging the auctions. 202 00:10:50,640 --> 00:10:52,439 Speaker 3: And he kind of walked through each of those and 203 00:10:52,559 --> 00:10:54,199 Speaker 3: it was it was easy to follow. 204 00:10:54,720 --> 00:10:57,480 Speaker 2: And what was his testimony Exactly what did he get into. 205 00:10:57,880 --> 00:11:00,600 Speaker 1: Well, he walked through that that last look and why 206 00:11:00,720 --> 00:11:04,120 Speaker 1: that was so important as an example that we just 207 00:11:04,200 --> 00:11:08,760 Speaker 1: talked about. He talked through something called dynamic revenue sharing, 208 00:11:09,480 --> 00:11:14,400 Speaker 1: which is a pretty big advantage that Google just gave 209 00:11:14,480 --> 00:11:19,559 Speaker 1: itself in addicts also where you know, they the way 210 00:11:19,679 --> 00:11:23,439 Speaker 1: he testified was that Google recognized and there's there's tons 211 00:11:23,440 --> 00:11:25,760 Speaker 1: of emails that they put up that back this up. 212 00:11:25,920 --> 00:11:28,800 Speaker 1: So it's not or maybe past the stage of having 213 00:11:28,840 --> 00:11:31,000 Speaker 1: to say their allegations because there was evidence going up 214 00:11:31,000 --> 00:11:35,679 Speaker 1: on screens. But what they did was, you know, Google 215 00:11:35,720 --> 00:11:39,439 Speaker 1: takes twenty percent, as I mentioned, of the transactions that 216 00:11:39,520 --> 00:11:42,240 Speaker 1: go through addicts, and so the other eighty percent goes 217 00:11:42,280 --> 00:11:46,000 Speaker 1: to the publisher. So in simple terms, if it's a dollar, 218 00:11:46,600 --> 00:11:48,960 Speaker 1: if it's a dollar transaction, Google's going to take twenty cents, 219 00:11:49,000 --> 00:11:50,000 Speaker 1: the Publisher's. 220 00:11:49,520 --> 00:11:50,440 Speaker 3: Going to take eighty cents. 221 00:11:51,080 --> 00:11:52,920 Speaker 1: And what they did was they said, you know what, 222 00:11:53,120 --> 00:11:56,240 Speaker 1: if we've got this last look and we know that 223 00:11:56,360 --> 00:11:59,160 Speaker 1: somebody else is going to win this ad at eighty 224 00:11:59,280 --> 00:12:02,840 Speaker 1: one cents, because we're only going to get eighty cents 225 00:12:02,840 --> 00:12:05,600 Speaker 1: across to the publisher, why don't we take our revenue 226 00:12:05,640 --> 00:12:09,280 Speaker 1: share down off twenty percent to fifteen percent and. 227 00:12:09,360 --> 00:12:12,200 Speaker 3: So then we'll win out and eighty five cents will 228 00:12:12,200 --> 00:12:13,160 Speaker 3: go through and will win the bid. 229 00:12:14,000 --> 00:12:18,240 Speaker 1: And so, in Google's own words, in their own email, 230 00:12:18,480 --> 00:12:21,480 Speaker 1: they described it as just another way to exploit the 231 00:12:21,520 --> 00:12:23,719 Speaker 1: fact that they had last look. So we've got this 232 00:12:23,880 --> 00:12:25,960 Speaker 1: last look, why don't we come off of our twenty 233 00:12:26,000 --> 00:12:29,320 Speaker 1: percent share if it allows us to win the impression, 234 00:12:30,679 --> 00:12:33,559 Speaker 1: and so that's a way to take. You know, it 235 00:12:33,600 --> 00:12:37,480 Speaker 1: didn't actually drive that much more revenue through, but what 236 00:12:37,600 --> 00:12:40,160 Speaker 1: it did was it gave them a lot more volume 237 00:12:40,200 --> 00:12:42,600 Speaker 1: and activity. A lot more of the bids were won 238 00:12:42,679 --> 00:12:45,719 Speaker 1: through their exchange rather than the other competitive exchanges that 239 00:12:45,760 --> 00:12:46,160 Speaker 1: were out there. 240 00:12:46,200 --> 00:12:46,880 Speaker 3: If that makes sense. 241 00:12:47,760 --> 00:12:51,679 Speaker 2: It does. So you talk about them needing addicts to 242 00:12:52,320 --> 00:12:54,640 Speaker 2: like forgive me in for sense to this book. The 243 00:12:54,800 --> 00:12:57,520 Speaker 2: demand that they have, that's really their secret source, the 244 00:12:57,559 --> 00:13:00,920 Speaker 2: demand that they can source. Why is an Why can't 245 00:13:00,960 --> 00:13:03,199 Speaker 2: anyone else get that kind of demand? What is it 246 00:13:03,280 --> 00:13:04,079 Speaker 2: that's stopping them? 247 00:13:04,679 --> 00:13:05,360 Speaker 3: Well it starts. 248 00:13:05,480 --> 00:13:07,280 Speaker 1: That's where this is interesting because it kind of starts 249 00:13:07,360 --> 00:13:12,000 Speaker 1: with the search trial that they just won last month, right, 250 00:13:12,120 --> 00:13:15,319 Speaker 1: and so that remember the the other case over in 251 00:13:15,440 --> 00:13:20,040 Speaker 1: DC was that Google has monopoly power over search text 252 00:13:20,120 --> 00:13:23,720 Speaker 1: advertising too, and so they've got this platform in which 253 00:13:24,120 --> 00:13:28,520 Speaker 1: advertiser going into buy ads in which they've got monopoly power. 254 00:13:29,400 --> 00:13:34,560 Speaker 3: And so trying to convince you know a lot of smaller. 255 00:13:34,240 --> 00:13:38,920 Speaker 1: Business advertisers out there, small market advertisers to go through 256 00:13:39,000 --> 00:13:42,839 Speaker 1: another platform is in itself difficult. There's friction there, and 257 00:13:42,960 --> 00:13:46,840 Speaker 1: so everybody spends money on Google already, and so they 258 00:13:46,880 --> 00:13:49,720 Speaker 1: already come in with that massive advantage, and. 259 00:13:49,760 --> 00:13:52,120 Speaker 2: It's it's more expensive to use other platforms, is it 260 00:13:52,200 --> 00:13:53,920 Speaker 2: more burdensome to set up with them? 261 00:13:54,679 --> 00:13:56,880 Speaker 1: You know, we haven't really got into the quality of 262 00:13:56,960 --> 00:14:00,000 Speaker 1: the buyside platforms. They seem, you know, to be discribed 263 00:14:00,200 --> 00:14:03,600 Speaker 1: as relatively comparable. So it's more a matter of having 264 00:14:03,679 --> 00:14:06,760 Speaker 1: one central, you know, interface in which you're buying. So 265 00:14:06,960 --> 00:14:09,160 Speaker 1: but it's clearly, you know that money is going to 266 00:14:09,200 --> 00:14:10,920 Speaker 1: be coming through from the Google site no matter what, 267 00:14:11,920 --> 00:14:13,839 Speaker 1: that's going to go to Google's platforms is going to 268 00:14:13,880 --> 00:14:16,320 Speaker 1: go to the wider web. And so they just walk 269 00:14:16,360 --> 00:14:18,880 Speaker 1: in with a massive advantage on the demand side. And 270 00:14:19,200 --> 00:14:22,040 Speaker 1: so the real, you know, the real challenge is that 271 00:14:22,160 --> 00:14:24,880 Speaker 1: that or the issue is that demand should be able 272 00:14:24,960 --> 00:14:28,040 Speaker 1: to go to other exchanges, not just to Googles. And 273 00:14:28,360 --> 00:14:30,760 Speaker 1: that's where I think Google's trying to set up its 274 00:14:30,800 --> 00:14:34,640 Speaker 1: defense is that that they shouldn't have to connect their 275 00:14:34,680 --> 00:14:35,880 Speaker 1: demand to other platforms. 276 00:14:36,280 --> 00:14:38,840 Speaker 3: There's no there's no issue with well, we'll get to 277 00:14:38,880 --> 00:14:39,880 Speaker 3: the legal piece of it, the. 278 00:14:39,880 --> 00:14:43,440 Speaker 2: Good Yeah, even though that seems a perfectly reasonable thing 279 00:14:43,520 --> 00:14:47,400 Speaker 2: to say for anything like this, right connecting. So is 280 00:14:47,480 --> 00:14:51,000 Speaker 2: this suggesting that all Google so do all Google properties 281 00:14:51,120 --> 00:14:53,760 Speaker 2: run through at X, Like you can't buy advertising on 282 00:14:53,960 --> 00:14:56,200 Speaker 2: Google Ads without going through at. 283 00:14:56,280 --> 00:15:02,240 Speaker 1: X, can't buy now, So I'm sorry to Yeah, I 284 00:15:02,320 --> 00:15:05,840 Speaker 1: wish I had my visuals we're talking, but you can't 285 00:15:06,920 --> 00:15:10,760 Speaker 1: if the advertising demand on the buy side on Google 286 00:15:11,480 --> 00:15:16,120 Speaker 1: that has to go through ad X in order to 287 00:15:16,240 --> 00:15:17,600 Speaker 1: go to other publishers. 288 00:15:17,680 --> 00:15:20,040 Speaker 3: And so right, yeah, I think that's the same thing 289 00:15:20,080 --> 00:15:20,520 Speaker 3: you were saying. 290 00:15:20,640 --> 00:15:24,760 Speaker 2: So, yes, Britty, and that demand is coming from advertisers, 291 00:15:24,800 --> 00:15:27,200 Speaker 2: as in people who want to advertise on different platforms, 292 00:15:27,240 --> 00:15:32,920 Speaker 2: that's right, But then it goes through ad X and 293 00:15:33,080 --> 00:15:36,080 Speaker 2: then Google basically gets the monkey with at the beginning 294 00:15:36,120 --> 00:15:38,520 Speaker 2: of the end of it. It's just it feels fairly, 295 00:15:39,680 --> 00:15:40,480 Speaker 2: fairly crooked. 296 00:15:42,400 --> 00:15:44,160 Speaker 1: That's the feeling when you're sitting in the room. It 297 00:15:44,320 --> 00:15:45,760 Speaker 1: very much does. And there's a lot of, you know, 298 00:15:45,840 --> 00:15:48,640 Speaker 1: emails from Google employees where you can tell they feel 299 00:15:48,720 --> 00:15:51,080 Speaker 1: like this might be a little crooked, you know. 300 00:15:51,320 --> 00:15:55,200 Speaker 2: So there was the thing The Verge quoted a particular 301 00:15:55,280 --> 00:15:58,640 Speaker 2: witness and news corp that seemed quite interesting who said 302 00:15:58,680 --> 00:16:03,720 Speaker 2: she felt like they were being held hostage by Google. 303 00:16:04,680 --> 00:16:07,000 Speaker 3: Did you I did? Yeah, she was, she was really 304 00:16:07,040 --> 00:16:11,040 Speaker 3: see laser. She no longer is with news courts. She's 305 00:16:11,160 --> 00:16:13,720 Speaker 3: actually at Amazon now, which is interesting. 306 00:16:13,800 --> 00:16:17,920 Speaker 1: But she she gave really clear evidence and testimony, and 307 00:16:19,160 --> 00:16:22,480 Speaker 1: you know, she she was explaining how there was really 308 00:16:22,560 --> 00:16:26,200 Speaker 1: no choice to use any platform but DFP as their 309 00:16:26,240 --> 00:16:30,320 Speaker 1: ad server, and therefore with it, it comes with all 310 00:16:30,400 --> 00:16:34,200 Speaker 1: these other obligations. And you know, the one thing that 311 00:16:34,320 --> 00:16:38,040 Speaker 1: Google did that she seemed to really not like was 312 00:16:39,000 --> 00:16:41,640 Speaker 1: there is a point that was important in time where 313 00:16:41,800 --> 00:16:45,960 Speaker 1: Google ted to publishers you can no longer have floors 314 00:16:46,640 --> 00:16:49,520 Speaker 1: price floors on individual exchanges. 315 00:16:49,680 --> 00:16:51,120 Speaker 3: So yeah, what does that mean? 316 00:16:51,920 --> 00:16:55,880 Speaker 1: Essentially, if you're a publisher, if you're a website and 317 00:16:56,600 --> 00:17:00,160 Speaker 1: you're saying, I have this AD that's available, and I 318 00:17:00,360 --> 00:17:05,919 Speaker 1: will allow five different exchanges to put forward their highest 319 00:17:05,960 --> 00:17:06,680 Speaker 1: bid for it. 320 00:17:06,840 --> 00:17:09,040 Speaker 2: And when you say AD available, you mean like space 321 00:17:09,160 --> 00:17:09,879 Speaker 2: on a website too. 322 00:17:10,160 --> 00:17:11,680 Speaker 3: They can add banner on their homepage. 323 00:17:11,760 --> 00:17:14,560 Speaker 1: Yeah, so a banner on their homepage and they're making 324 00:17:14,600 --> 00:17:17,639 Speaker 1: it available to let's say five different exchanges. One of 325 00:17:17,680 --> 00:17:21,080 Speaker 1: those is ad X, but then let's say also Pobmatic 326 00:17:21,280 --> 00:17:25,399 Speaker 1: and Rubicon in exchange, these various SSP's we call them. 327 00:17:25,480 --> 00:17:28,960 Speaker 4: And for a while you could actually set a price 328 00:17:29,080 --> 00:17:32,480 Speaker 4: floor essentially the lowest price you were willing to sell 329 00:17:32,600 --> 00:17:36,240 Speaker 4: that banner on the homepage, and you could set it 330 00:17:36,320 --> 00:17:38,119 Speaker 4: individually based on the exchange. 331 00:17:38,520 --> 00:17:40,920 Speaker 1: So what publishers were often doing was they were putting 332 00:17:40,920 --> 00:17:44,040 Speaker 1: a higher price floor for ad X, for Google, for 333 00:17:44,080 --> 00:17:47,200 Speaker 1: add X for a number of reasons, you know. And 334 00:17:47,280 --> 00:17:50,440 Speaker 1: some of those reasons included wanting to diversify so not 335 00:17:50,520 --> 00:17:53,400 Speaker 1: all the revenue and spend was coming from Google because 336 00:17:53,440 --> 00:17:57,520 Speaker 1: that could create risk as we see. They also wanted 337 00:17:57,560 --> 00:17:59,600 Speaker 1: to manage the quality of the ads because sometimes the 338 00:17:59,640 --> 00:18:02,240 Speaker 1: ads is a high quality coming through at X. So 339 00:18:02,280 --> 00:18:04,080 Speaker 1: by having a higher price point, it kind of weeded 340 00:18:04,119 --> 00:18:06,399 Speaker 1: out some of the garbage. And so there there are 341 00:18:06,400 --> 00:18:08,640 Speaker 1: a number of reasons. And at this moment in time, 342 00:18:08,760 --> 00:18:11,240 Speaker 1: Google said, you know what, you now need to have 343 00:18:11,320 --> 00:18:15,960 Speaker 1: a universal price floor across everyone, and that basically gave 344 00:18:16,080 --> 00:18:19,200 Speaker 1: ad X the same, you know, the same advantage, made 345 00:18:19,200 --> 00:18:21,120 Speaker 1: sure it had the same price floor as everyone else. 346 00:18:21,640 --> 00:18:24,879 Speaker 2: But how do they maintain a price floor across other platforms, 347 00:18:25,040 --> 00:18:27,680 Speaker 2: Like how did they just say if you violate this, 348 00:18:27,840 --> 00:18:29,120 Speaker 2: you're off of our ad platform. 349 00:18:29,440 --> 00:18:32,840 Speaker 3: Well, it all it's because again DFP, the ad server 350 00:18:34,119 --> 00:18:38,000 Speaker 3: is also Google, so it's the source of truth. Yeah. 351 00:18:38,160 --> 00:18:41,200 Speaker 2: So they so they own the place where ads negotiate, 352 00:18:41,480 --> 00:18:43,520 Speaker 2: the place where ads come from, and then the server 353 00:18:43,640 --> 00:18:46,440 Speaker 2: that puts the ads on places bing go. That's really 354 00:18:46,920 --> 00:18:47,440 Speaker 2: that's good. 355 00:18:48,200 --> 00:18:50,520 Speaker 3: That seems that seems like if you can, if you 356 00:18:50,520 --> 00:18:51,119 Speaker 3: can keep it right. 357 00:18:51,320 --> 00:19:06,200 Speaker 2: Yeah, but that might be a problem for them. So 358 00:19:06,760 --> 00:19:10,800 Speaker 2: whether on the other really cool like publisher witnesses interesting people. 359 00:19:11,359 --> 00:19:13,840 Speaker 2: So on the publisher side for listeners, we're just saying 360 00:19:13,880 --> 00:19:16,520 Speaker 2: that's the people putting ads up. Sorry, they're the ones 361 00:19:16,560 --> 00:19:17,840 Speaker 2: providing at inventory. 362 00:19:18,640 --> 00:19:22,159 Speaker 1: Yeah, you know, we heard from Gannette was awesome. He 363 00:19:22,240 --> 00:19:25,679 Speaker 1: was actually the first witness Gannet, the big newspaper company. 364 00:19:26,600 --> 00:19:30,720 Speaker 1: They're head of their ad operations group. That was the 365 00:19:30,800 --> 00:19:34,760 Speaker 1: very first witness on Monday. You know, he really set 366 00:19:34,880 --> 00:19:39,200 Speaker 1: up the some of the basic foundation of the case. So, 367 00:19:39,480 --> 00:19:41,680 Speaker 1: you know, I think it was enough. 368 00:19:41,560 --> 00:19:42,760 Speaker 3: Really from the publisher side. 369 00:19:42,800 --> 00:19:44,760 Speaker 1: Now we're actually deeper in the weeds of the conduct 370 00:19:44,840 --> 00:19:46,960 Speaker 1: issues and some of these like you know, the revenue 371 00:19:46,960 --> 00:19:48,600 Speaker 1: sharing were going through and some of these other games 372 00:19:48,640 --> 00:19:52,200 Speaker 1: that they played. You know, I think the most actually 373 00:19:52,200 --> 00:19:54,600 Speaker 1: the most interesting one, if I can digress for a second, 374 00:19:55,240 --> 00:19:58,879 Speaker 1: the revenue the dynamic revenue sharing where they would come 375 00:19:59,000 --> 00:20:02,879 Speaker 1: off the twenty percent and drop down. They actually came 376 00:20:02,960 --> 00:20:07,240 Speaker 1: out with dynamic revenue Sharing two, where they seemed to 377 00:20:07,320 --> 00:20:10,000 Speaker 1: realize that, you know, it was hurting their margins coming 378 00:20:10,040 --> 00:20:13,119 Speaker 1: down off twenty percent in order to win the transaction, 379 00:20:13,760 --> 00:20:16,040 Speaker 1: so they decided they would also go higher than twenty 380 00:20:16,080 --> 00:20:20,080 Speaker 1: percent when they had a high enough bid already, and 381 00:20:20,200 --> 00:20:23,200 Speaker 1: that would allow them to recoup that margin. And so 382 00:20:23,480 --> 00:20:26,639 Speaker 1: they essentially described it as a bank in which they 383 00:20:26,720 --> 00:20:29,440 Speaker 1: could as the expert would have said, he described it 384 00:20:29,480 --> 00:20:32,760 Speaker 1: as imposing a debt on the publishers, where basically Google 385 00:20:32,800 --> 00:20:35,040 Speaker 1: would say, you know what, We're going to go offer 386 00:20:35,240 --> 00:20:38,119 Speaker 1: take less than twenty percent revenue share in order to 387 00:20:38,160 --> 00:20:40,000 Speaker 1: win and add but then we're going to go ahead 388 00:20:40,000 --> 00:20:42,600 Speaker 1: and hold a little debt for you publisher, and we're 389 00:20:42,600 --> 00:20:44,520 Speaker 1: going to take that money back later on and pay 390 00:20:44,520 --> 00:20:45,200 Speaker 1: ourselves back. 391 00:20:45,720 --> 00:20:48,520 Speaker 2: Wait, so when they came up, so when they reduced 392 00:20:48,560 --> 00:20:52,640 Speaker 2: their car to win a bit, they would then take 393 00:20:52,800 --> 00:20:55,280 Speaker 2: the remainder of the car that they had lost and 394 00:20:55,400 --> 00:20:57,440 Speaker 2: then charge the people they were meant to give money. 395 00:20:57,760 --> 00:20:59,200 Speaker 2: So the place where the app was going. 396 00:20:59,520 --> 00:21:02,439 Speaker 1: Yes later but later on, so you know, maybe they 397 00:21:03,040 --> 00:21:06,480 Speaker 1: one ad goes through at a fifteen percent revenue share, 398 00:21:06,640 --> 00:21:08,760 Speaker 1: that they came down off twenty percent in order to 399 00:21:08,840 --> 00:21:12,280 Speaker 1: win that transaction, and then maybe the next time an 400 00:21:12,280 --> 00:21:14,320 Speaker 1: AD went through on that site they would. 401 00:21:14,080 --> 00:21:16,280 Speaker 3: Take you know, twenty four percent or whatever it is 402 00:21:16,280 --> 00:21:17,440 Speaker 3: in order to pay themselves back. 403 00:21:18,080 --> 00:21:20,359 Speaker 2: How did how the odd my friends, or how the 404 00:21:20,400 --> 00:21:23,360 Speaker 2: fuck is that lead? Like? What the that's insane? 405 00:21:23,640 --> 00:21:25,159 Speaker 1: Well, that's what we're going to find out, right, I mean, 406 00:21:25,600 --> 00:21:27,720 Speaker 1: imposing a debt on publishers. I wrote that down in 407 00:21:27,760 --> 00:21:29,240 Speaker 1: my notebook as soon as he said it, because I 408 00:21:29,320 --> 00:21:29,960 Speaker 1: was thinking. 409 00:21:29,800 --> 00:21:34,000 Speaker 3: Yeah, that's what that is. And so if the publisher didn't. 410 00:21:33,840 --> 00:21:36,119 Speaker 1: Know that that debt was being imposed on them, or 411 00:21:36,160 --> 00:21:39,520 Speaker 1: if it was unclear or they were being misled, which 412 00:21:39,520 --> 00:21:41,760 Speaker 1: seems to be the case often, then you know, that's 413 00:21:41,800 --> 00:21:44,960 Speaker 1: significant harm to the publishers. It's it's bit we're talking 414 00:21:45,080 --> 00:21:48,080 Speaker 1: billions of dollars if it's a matter of twenty percent 415 00:21:48,240 --> 00:21:50,800 Speaker 1: versus eighteen percent, you know, coming down off that number. 416 00:21:51,640 --> 00:21:54,080 Speaker 2: So are there any other harms they've discussed otherwise that 417 00:21:54,119 --> 00:21:55,840 Speaker 2: Google's actions of harmed others? 418 00:21:56,640 --> 00:21:58,160 Speaker 1: Well, I mean certainly there's been harm to the other 419 00:21:58,359 --> 00:22:03,119 Speaker 1: ad exchange, to the other add tech companies too that haven't. 420 00:22:02,840 --> 00:22:04,720 Speaker 3: Been able to compete because of that monopi power. 421 00:22:04,760 --> 00:22:07,760 Speaker 1: We haven't really seen from the buy side yet in 422 00:22:07,880 --> 00:22:11,480 Speaker 1: terms of, you know, how it affects the advertisers. 423 00:22:12,240 --> 00:22:13,840 Speaker 3: We had two different. 424 00:22:13,600 --> 00:22:17,840 Speaker 1: Ad agcy executives testify, you know, it was good, it 425 00:22:17,920 --> 00:22:20,640 Speaker 1: was solid, it was kind of foundational. But I want 426 00:22:20,720 --> 00:22:23,920 Speaker 1: to really see the just department connect the dots still 427 00:22:24,119 --> 00:22:28,800 Speaker 1: on how those harmed advertisers, because it's you know, it's 428 00:22:28,880 --> 00:22:32,920 Speaker 1: fairly clear that Google's going to, as its defense, say 429 00:22:33,080 --> 00:22:36,040 Speaker 1: you know what, we made a market that yes, we 430 00:22:36,480 --> 00:22:38,879 Speaker 1: dominate the buy side the cell side, and we control 431 00:22:38,920 --> 00:22:41,000 Speaker 1: the auctions and we do all these funny business games, 432 00:22:41,600 --> 00:22:44,480 Speaker 1: but we do it to be more efficient and you know, 433 00:22:44,600 --> 00:22:47,800 Speaker 1: and our advertisers are all happy, and so what's the 434 00:22:47,920 --> 00:22:50,320 Speaker 1: harm that's I mean, that's clearly where they're going. 435 00:22:51,000 --> 00:22:52,679 Speaker 3: And so I think those dots need to be connected 436 00:22:52,720 --> 00:22:52,919 Speaker 3: a bit. 437 00:22:53,480 --> 00:22:55,639 Speaker 2: It feels like they can't really say that that's the 438 00:22:55,720 --> 00:22:58,320 Speaker 2: case though, because the way this harms advertises is this 439 00:22:58,520 --> 00:23:02,479 Speaker 2: must raise prices or at least manipulate them to benefit Google. 440 00:23:02,960 --> 00:23:05,640 Speaker 1: Yeah, I mean there's there's a boat that and then 441 00:23:05,720 --> 00:23:07,239 Speaker 1: you know what we don't know too and I think, 442 00:23:07,840 --> 00:23:09,840 Speaker 1: you know, there will be one or two economists that 443 00:23:09,880 --> 00:23:12,880 Speaker 1: will probably have testify next week, and I think that's 444 00:23:12,920 --> 00:23:14,480 Speaker 1: the part that they'll also land in. 445 00:23:15,200 --> 00:23:18,800 Speaker 2: Has anyone from Google kind of like said anything? Has that? 446 00:23:18,880 --> 00:23:20,720 Speaker 2: Have they managed to get anyone to flip on the 447 00:23:20,760 --> 00:23:21,400 Speaker 2: Google side? 448 00:23:21,600 --> 00:23:24,760 Speaker 1: There was only only one of the ex employees. I 449 00:23:24,960 --> 00:23:27,800 Speaker 1: think all the ex employees were somewhat damaging, but only 450 00:23:27,960 --> 00:23:32,440 Speaker 1: one of them that was I think really sympathetic and 451 00:23:32,880 --> 00:23:36,040 Speaker 1: the case and uh, he just seemed to have no 452 00:23:36,200 --> 00:23:40,040 Speaker 1: love for for the He called it the machine for he. 453 00:23:40,040 --> 00:23:43,360 Speaker 3: Would describe like where he knew things were not right. 454 00:23:44,520 --> 00:23:48,000 Speaker 1: They were they were not doing the right thing as 455 00:23:48,080 --> 00:23:52,600 Speaker 1: a company, and his colleagues would agree, and then they 456 00:23:52,680 --> 00:23:56,320 Speaker 1: would propose a change, and then it would get denied. 457 00:23:56,320 --> 00:23:58,720 Speaker 1: It would come back from the machine and the people 458 00:23:58,800 --> 00:24:02,000 Speaker 1: on the other side, he said, that would overrule what 459 00:24:02,080 --> 00:24:04,320 Speaker 1: they wanted to do. He never figured out who was 460 00:24:04,320 --> 00:24:07,600 Speaker 1: on the other side. He said, he'd kind of comment 461 00:24:07,640 --> 00:24:09,320 Speaker 1: on it. I never really knew where that decision was 462 00:24:09,359 --> 00:24:11,760 Speaker 1: coming from, but it would come back as a no. 463 00:24:12,560 --> 00:24:17,480 Speaker 3: And so that was I Lipki was yeah, good, good call. 464 00:24:17,640 --> 00:24:20,280 Speaker 2: Yes, Oh yeah, So that's what I'm here for. It's 465 00:24:20,800 --> 00:24:25,120 Speaker 2: it's really funny because all of this has been going 466 00:24:25,200 --> 00:24:28,440 Speaker 2: on decades. That's what really astonishes me. This isn't even 467 00:24:28,680 --> 00:24:32,520 Speaker 2: subtle what's going on. I haven't really dug too deeply 468 00:24:32,600 --> 00:24:36,000 Speaker 2: and I know why will into the discovery and actually 469 00:24:36,160 --> 00:24:38,920 Speaker 2: have they been providing a bunch of intal So you 470 00:24:38,920 --> 00:24:41,080 Speaker 2: said there's a bunch of emails that been in lots 471 00:24:41,119 --> 00:24:41,359 Speaker 2: of them. 472 00:24:41,560 --> 00:24:43,320 Speaker 3: There's been a lot, a lot of new documents. 473 00:24:43,400 --> 00:24:47,280 Speaker 1: Yeah, a lot of emails and I'd say about twenty 474 00:24:47,400 --> 00:24:50,040 Speaker 1: or thirty are going up on the department site per day. 475 00:24:50,080 --> 00:24:53,119 Speaker 3: And I think I mentioned on our opening session, but 476 00:24:53,640 --> 00:24:54,720 Speaker 3: USV Google. 477 00:24:54,520 --> 00:24:58,040 Speaker 1: Ads dot Com has all the exhibits and they're all searchable, 478 00:24:58,080 --> 00:25:00,879 Speaker 1: et cetera. They're doing a great job managing that. But 479 00:25:01,040 --> 00:25:03,239 Speaker 1: you know, there's a lot of material. And the other 480 00:25:03,320 --> 00:25:04,960 Speaker 1: thing that is happening, because we talked about it on 481 00:25:05,000 --> 00:25:07,479 Speaker 1: the first show, is they're really landing the bus part 482 00:25:07,600 --> 00:25:10,879 Speaker 1: is really landing that there is evidence that we're not seeing. 483 00:25:11,359 --> 00:25:15,000 Speaker 1: And so they've asked a number of the ex Google 484 00:25:15,040 --> 00:25:19,440 Speaker 1: employees about having their chats automatically deeply lead after twenty 485 00:25:19,480 --> 00:25:23,560 Speaker 1: four hours and why they didn't honor the litigation hold 486 00:25:23,720 --> 00:25:27,560 Speaker 1: and the judge leaned in several times on that where 487 00:25:28,480 --> 00:25:30,800 Speaker 1: she asked questions of the witness and said, why, you know, 488 00:25:31,000 --> 00:25:33,639 Speaker 1: when did you get this litigation hold? Why didn't you 489 00:25:33,760 --> 00:25:36,359 Speaker 1: preserve your chats? What did you understand? And so I 490 00:25:36,400 --> 00:25:37,760 Speaker 1: think that's also going to hang over. 491 00:25:37,680 --> 00:25:38,480 Speaker 3: Them the rest of the trial. 492 00:25:38,800 --> 00:25:41,760 Speaker 2: And has that been a consistent theme because I did, Yeah, 493 00:25:42,240 --> 00:25:45,320 Speaker 2: I did see a message with friend of the show, 494 00:25:45,400 --> 00:25:49,560 Speaker 2: pravagar Ragavan saying responding to someone and saying, oh wait, 495 00:25:49,680 --> 00:25:53,160 Speaker 2: this chat's on the record, which is so bad. 496 00:25:53,480 --> 00:25:54,320 Speaker 3: That's really bad. 497 00:25:55,480 --> 00:25:59,280 Speaker 1: That's really bad. Well, yeah, it's a consistent theme. And 498 00:25:59,440 --> 00:26:03,680 Speaker 1: I would get lightly if I were Google. And because 499 00:26:04,000 --> 00:26:06,040 Speaker 1: you know, she already said that she was gonna affect 500 00:26:06,040 --> 00:26:09,200 Speaker 1: the credibility of every witness, and so you've got Isazar. 501 00:26:09,359 --> 00:26:12,119 Speaker 1: We mentioned a guy named Chris Lsala who ran their 502 00:26:12,480 --> 00:26:17,160 Speaker 1: publisher operations globally testified this morning Brad Bender a couple 503 00:26:17,200 --> 00:26:17,640 Speaker 1: of days ago. 504 00:26:17,680 --> 00:26:19,800 Speaker 3: These are former employees and. 505 00:26:19,920 --> 00:26:23,119 Speaker 1: So you know, even though they weren't I think, really 506 00:26:23,200 --> 00:26:27,240 Speaker 1: damaging as witnesses. I think the judge also knows she didn't. 507 00:26:27,400 --> 00:26:30,280 Speaker 1: We're not seeing everything probably so and she has to 508 00:26:30,320 --> 00:26:31,080 Speaker 1: make that inference. 509 00:26:31,359 --> 00:26:32,680 Speaker 3: And then on top of that. 510 00:26:33,280 --> 00:26:35,359 Speaker 1: I think the first witness every day next week is 511 00:26:35,359 --> 00:26:38,560 Speaker 1: also a Google employee. I mean Monday is Monday at 512 00:26:39,080 --> 00:26:41,720 Speaker 1: nine am, will be Neil Mohan, who was the CEO 513 00:26:41,760 --> 00:26:43,720 Speaker 1: of double Click when they sold it to Google. He 514 00:26:43,840 --> 00:26:46,040 Speaker 1: was the he brought the deal in and he continued 515 00:26:46,080 --> 00:26:48,400 Speaker 1: to run it for quite some time. And now he's 516 00:26:48,400 --> 00:26:49,200 Speaker 1: the CEO of YouTube. 517 00:26:49,280 --> 00:26:51,800 Speaker 3: So so I think there'll be a. 518 00:26:51,800 --> 00:26:54,359 Speaker 1: Really important witness. He's probably one of the guys on 519 00:26:54,400 --> 00:26:58,000 Speaker 1: the other side that you know, the machine could. 520 00:26:58,400 --> 00:27:01,600 Speaker 2: So right now, the Department of Justice is making the case. 521 00:27:02,040 --> 00:27:05,040 Speaker 2: How long left do we have of that before Google 522 00:27:05,119 --> 00:27:07,159 Speaker 2: gets to make their I. 523 00:27:07,160 --> 00:27:10,080 Speaker 1: Would have to imagine at least another week to week 524 00:27:10,080 --> 00:27:12,880 Speaker 1: and a half and then Google will have another week 525 00:27:13,080 --> 00:27:15,240 Speaker 1: or so probably for their defense and we'll get to 526 00:27:15,240 --> 00:27:19,360 Speaker 1: closing arguments by the first week of October. 527 00:27:20,560 --> 00:27:23,080 Speaker 2: Very cool. And how do you think that the Development 528 00:27:23,119 --> 00:27:25,679 Speaker 2: of Justice is making the case convincingly? 529 00:27:26,400 --> 00:27:27,680 Speaker 3: I think they are. Yeah. 530 00:27:27,760 --> 00:27:32,240 Speaker 1: I mean Google's strategy in the beginning seemed to be confusion. 531 00:27:32,320 --> 00:27:35,960 Speaker 1: It was both to try to confuse the market, that's 532 00:27:36,000 --> 00:27:40,040 Speaker 1: not three markets. They've tried to argue that the display 533 00:27:40,160 --> 00:27:44,040 Speaker 1: ads are the same as TikTok ads and Facebook ads 534 00:27:44,080 --> 00:27:48,199 Speaker 1: and they've lost that. And the opening statement that they did, 535 00:27:49,160 --> 00:27:52,080 Speaker 1: which I think it got some reporting on this. It 536 00:27:52,160 --> 00:27:55,919 Speaker 1: was Karen Dunn, who's their lead defense attorney from Paul Weitz. 537 00:27:56,040 --> 00:27:58,520 Speaker 1: She did the opening statement for half an hour and 538 00:27:58,640 --> 00:28:01,600 Speaker 1: she just really tried to sandwich in just she ran 539 00:28:01,640 --> 00:28:02,800 Speaker 1: out of time and had. 540 00:28:02,720 --> 00:28:03,679 Speaker 3: To cut on the fly. 541 00:28:04,480 --> 00:28:06,840 Speaker 1: Just a lot of technical terms and a lot of 542 00:28:06,960 --> 00:28:10,000 Speaker 1: jargon from the industry. I think they try to confuse 543 00:28:10,080 --> 00:28:14,360 Speaker 1: the judge up front. She got some pressed because interesting enough, 544 00:28:14,440 --> 00:28:15,960 Speaker 1: she ran out of the room as soon as she 545 00:28:16,040 --> 00:28:19,280 Speaker 1: finished at whatever was ten am on Monday, she ran 546 00:28:19,320 --> 00:28:20,840 Speaker 1: out of the room to go because she was also 547 00:28:21,680 --> 00:28:26,760 Speaker 1: the lead advisor and coach for Kamala Harris for the debate, 548 00:28:27,280 --> 00:28:29,879 Speaker 1: and so she literally she opened up on Monday and 549 00:28:30,000 --> 00:28:32,520 Speaker 1: she's leading the defense and then she also was helping 550 00:28:32,600 --> 00:28:33,760 Speaker 1: to prep Kamala. 551 00:28:33,920 --> 00:28:35,400 Speaker 3: So busy woman. 552 00:28:36,200 --> 00:28:40,120 Speaker 2: Yeah, so, I mean, kind of exciting, but also it 553 00:28:40,200 --> 00:28:42,760 Speaker 2: doesn't feel like Google is particularly well prepared for this. 554 00:28:42,840 --> 00:28:45,600 Speaker 2: I guess we'll see more in the defense, but it 555 00:28:45,640 --> 00:28:48,400 Speaker 2: doesn't seem like that plan is anything other than let's 556 00:28:48,440 --> 00:28:50,520 Speaker 2: confuse as much as humanly possible. 557 00:28:51,880 --> 00:28:54,400 Speaker 3: Yeah, I mean, I think I think that is my 558 00:28:54,600 --> 00:28:55,239 Speaker 3: read eye it too. 559 00:28:55,280 --> 00:28:56,680 Speaker 1: I think it's a good readout, even though they had 560 00:28:56,760 --> 00:29:00,720 Speaker 1: four years, I think because the state ag filed back 561 00:29:00,920 --> 00:29:03,720 Speaker 1: in twenty twenty, so they've had time to work through 562 00:29:03,760 --> 00:29:05,600 Speaker 1: their defense on this. But I think ultimately it's going 563 00:29:05,640 --> 00:29:09,360 Speaker 1: to come down to a legal issue. They're trying to 564 00:29:09,480 --> 00:29:12,920 Speaker 1: make the case about something that's called refusal to deal, 565 00:29:13,640 --> 00:29:16,880 Speaker 1: which there's some Supreme Court precedent on that they shouldn't 566 00:29:17,000 --> 00:29:22,520 Speaker 1: have to provide APIs or do deals with their rivals. 567 00:29:24,040 --> 00:29:26,880 Speaker 1: But with the monopoly power that they have, I don't 568 00:29:26,920 --> 00:29:29,640 Speaker 1: think that that's really the that's not the case. It's 569 00:29:29,680 --> 00:29:32,440 Speaker 1: a tying case where they're saying you can't have our 570 00:29:32,480 --> 00:29:35,040 Speaker 1: advertising demand unless you use these. 571 00:29:34,960 --> 00:29:37,120 Speaker 3: Other products where we also have monopoly power, and that's 572 00:29:37,320 --> 00:29:39,000 Speaker 3: I think that'll be enough for the just Department to win. 573 00:29:39,480 --> 00:29:43,080 Speaker 2: Also kind of feels like an argument that you could 574 00:29:43,120 --> 00:29:44,959 Speaker 2: win much better if it didn't seem like you were 575 00:29:45,000 --> 00:29:46,200 Speaker 2: deleting all this stuff. 576 00:29:47,120 --> 00:29:50,160 Speaker 3: That's exactly right, but the last smoke in the room 577 00:29:50,280 --> 00:29:50,600 Speaker 3: for sure. 578 00:29:51,080 --> 00:29:54,479 Speaker 2: So well, Jason, thank you so much for joining us 579 00:29:54,480 --> 00:29:56,400 Speaker 2: again for this. Where can people find you? 580 00:29:57,000 --> 00:30:00,480 Speaker 1: You can find me on Twitter's probably easiest Jason underscore 581 00:30:00,560 --> 00:30:04,080 Speaker 1: Kent KNT and I always look for vback okay. 582 00:30:04,360 --> 00:30:07,600 Speaker 2: And also go to usv Google ads dot com And 583 00:30:07,840 --> 00:30:10,480 Speaker 2: if any of this was slightly confusing, they have an 584 00:30:10,560 --> 00:30:14,560 Speaker 2: incredible trial resources bit with a glossary of terms with 585 00:30:14,680 --> 00:30:17,920 Speaker 2: ad tech explainers, I know, listeners. This is a lot. 586 00:30:18,280 --> 00:30:19,960 Speaker 2: It's a lot for me, and I'm steeped in this 587 00:30:20,080 --> 00:30:24,240 Speaker 2: crap all the time. But the people running usv Google 588 00:30:24,240 --> 00:30:25,720 Speaker 2: who was actually running that, Jason, do you know? 589 00:30:26,000 --> 00:30:28,480 Speaker 1: It's a coalition. But there's a group called check my 590 00:30:28,560 --> 00:30:30,800 Speaker 1: Ads that's taking lead on it. And I appreciate the 591 00:30:30,880 --> 00:30:33,880 Speaker 1: other mention of it because they're just doing a phenomenal job. 592 00:30:34,040 --> 00:30:38,080 Speaker 2: They really are, and also genuinely a lot of people 593 00:30:38,360 --> 00:30:40,800 Speaker 2: I would argue this is undercovered in the tech industry 594 00:30:41,000 --> 00:30:43,200 Speaker 2: just because this is the biggest thing happening in tech. 595 00:30:43,480 --> 00:30:46,120 Speaker 1: It is, and there's literally like three hundred billion dollars 596 00:30:46,160 --> 00:30:49,480 Speaker 1: of advertising spend you know that goes through through Google. 597 00:30:49,560 --> 00:30:51,240 Speaker 3: So it's what pays for all this journalism. 598 00:30:51,600 --> 00:30:53,600 Speaker 1: I also should mention because it's different than the search 599 00:30:53,680 --> 00:30:58,280 Speaker 1: trial that the National Press, New York Times, Washington Post, CNN, 600 00:30:58,440 --> 00:31:00,720 Speaker 1: they were all there on the first day, the wire 601 00:31:00,800 --> 00:31:05,520 Speaker 1: services were all there, the DC groups like Mlex and 602 00:31:05,600 --> 00:31:07,960 Speaker 1: Capital Form were there, but also the industry kind of 603 00:31:07,960 --> 00:31:11,520 Speaker 1: advertising trade press at Week, Digital Business Insider, marketing. 604 00:31:11,280 --> 00:31:15,680 Speaker 3: Brew and at exchange you We're all there. 605 00:31:15,720 --> 00:31:18,040 Speaker 1: There must have been thirty reporters there, many of them 606 00:31:18,040 --> 00:31:20,680 Speaker 1: were there the whole week, and there were ten cameras. 607 00:31:20,360 --> 00:31:23,000 Speaker 3: I counted outside of the courthouse, and so that actually 608 00:31:23,080 --> 00:31:25,680 Speaker 3: was a live attention on it, which is wonderful, which. 609 00:31:25,480 --> 00:31:28,040 Speaker 2: Is great, and I think everyone please go and check 610 00:31:28,120 --> 00:31:30,760 Speaker 2: out USB, Google Ads, go check out Jason, and you 611 00:31:30,800 --> 00:31:32,680 Speaker 2: can check out my various stuff that you'll hear in 612 00:31:32,720 --> 00:31:35,240 Speaker 2: a recorded clip off of this. Thank you for listening, Ei, 613 00:31:43,240 --> 00:31:45,640 Speaker 2: Thank you for listening to Better Offline. The editor and 614 00:31:45,680 --> 00:31:48,840 Speaker 2: composer of the Better Offline theme song is Metasowski. You 615 00:31:48,880 --> 00:31:51,080 Speaker 2: can check out more of his music and audio projects 616 00:31:51,280 --> 00:31:55,640 Speaker 2: at Matasowski dot com, m A. T. T OsO w 617 00:31:56,080 --> 00:31:59,560 Speaker 2: Ski dot com. You can email me an Easy at 618 00:31:59,600 --> 00:32:02,239 Speaker 2: betro line dot com or visit Better Offline dot com 619 00:32:02,320 --> 00:32:04,720 Speaker 2: to find more podcast links and of course my newsletter. 620 00:32:05,160 --> 00:32:07,640 Speaker 2: I also really recommend you go to chat dot Where's 621 00:32:07,680 --> 00:32:10,120 Speaker 2: youread dot at to visit the discord, and go to 622 00:32:10,200 --> 00:32:13,560 Speaker 2: our slash Better Offline to check out I'll Reddit. 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