Speaker 1: Also media.
Speaker 2: Hello and welcome to Betrofline. I'm your host ed Ze Trones.
Speaker 2: I am joined by Jason Kent, once again, the CEO DCN.
Speaker 2: We'll be telling us more about the first week of
Speaker 2: the Department of Justice versus Google ads. Jason, thank you
Speaker 2: so much for joining.
Speaker 3: Thanks for having me back edm thrilled to be here.
Speaker 2: So what's been happening since we lost spoke? How did
Speaker 2: the first week go?
Speaker 1: It's a blur. I mean, it's an impressive operation. I
Speaker 1: think we talked about how this district is known as
Speaker 1: the Rocket Docket and that's how they got from from
Speaker 1: filing a complaint to actual trial in like a year
Speaker 1: and a half. So it has that reputation and you
Speaker 1: kind of we saw it in action this week. I
Speaker 1: mean every day we started at nine am sharp, like
Speaker 1: clockwork until six pm with you know, three or four
Speaker 1: senior executives testified every day.
Speaker 2: And who's testified so far?
Speaker 3: Three or four ex Google employees. We've heard from.
Speaker 1: We've had CEOs of all the major ad tech companies,
Speaker 1: Andrew Casally from Index Exchange see.
Speaker 3: What magnite and Ruba Khan actually it's now called Magnite.
Speaker 3: And then well, else do we hear from?
Speaker 1: We heard two different publishers executives, so we kind of
Speaker 1: gone down the list. We've had one expert witness, computer
Speaker 1: science professor from Carnegie Mellon.
Speaker 2: So and so is this currently the Department of Justices case? Like,
Speaker 2: it's them them laying out that's your case.
Speaker 1: Yeah, yeah, this is what they call their case in
Speaker 1: chief and they'll take probably about I think two weeks
Speaker 1: and then Google have a chance to defend itself.
Speaker 2: So what's the thrust of their argument other than they
Speaker 2: have a monopoly.
Speaker 1: Well, let's say you know that there are three different
Speaker 1: markets at work here that that they have a monopoly in,
Speaker 1: so you you know, some of the back and forth
Speaker 1: is still Google trying to break that apart and blur
Speaker 1: into one single kind of two side and market they
Speaker 1: call it. But but the Justice Department is their complaint
Speaker 1: is that again that there's three markets. There's the cell side,
Speaker 1: there's the ad exchange, and then there's the buy side.
Speaker 1: Google in their opening statement has already tried to make
Speaker 1: the into one market that's a two sided market, trying
Speaker 1: to lean into a prior Supreme Court decision that involved
Speaker 1: American Express. I don't I don't think they'll have much
Speaker 1: success there. But once you get past proving that there's
Speaker 1: three markets there and that they've got monopoly power in them,
Speaker 1: then it's also a tying argument that they've used one
Speaker 1: of them, one of those to build up and maintain
Speaker 1: market power through through bad conduct to do that.
Speaker 2: So don me if I break me down those three
Speaker 2: parts then and then we can get into the A grade.
Speaker 3: Sure. So the the publisher side, the cell side.
Speaker 1: Google has the product that a lot of people still
Speaker 1: know as as DFP, which came from their Double Double
Speaker 1: Click acquisition. So that's the publisher ad server, and according
Speaker 1: to the Just Department's opening statement, they've got like ninety
Speaker 1: one percent of the market share for the publisher side.
Speaker 2: And a publisher in this case is like a website
Speaker 2: and be like a website the show's Google ads.
Speaker 1: On them exactly, And so that's the server that's it's
Speaker 1: kind of the sort I guess what you call the
Speaker 1: source of truth. We've always called it, but it's the
Speaker 1: it's the ad server that says, hey, I've got this AD,
Speaker 1: and then it takes care of deciding who wins it
Speaker 1: and ultimately rendering and serving the ad and then actually
Speaker 1: dealing with all the accounting.
Speaker 3: And inventory projections, et cetera.
Speaker 1: So that's that's the what's the cell side of the
Speaker 1: of this auction market as real time auction market. And
Speaker 1: then to go to the other side, you've got on
Speaker 1: the buy side. Google has their ad demand that they
Speaker 1: have through their ad network that they also have I
Speaker 1: think the just Department's arguing they have like eighty some
Speaker 1: percent of that market. That's really important because a lot
Speaker 1: of the arguments are that you couldn't use other products
Speaker 1: and still have access to.
Speaker 3: That Google demand, and so they use that.
Speaker 1: Advertising demand of advertisers that want to spend money in
Speaker 1: order to ensure that everyone else stays on their supply chain.
Speaker 1: And then in the middle is the ad exchange which
Speaker 1: Google is called ad X, and that's the exchange that
Speaker 1: acts as the ability to take in bids.
Speaker 3: Of that ad inventory and then clear them.
Speaker 2: And so it's the place where Google sells ads on
Speaker 2: Google to Google.
Speaker 1: No, it's the ad X would be the what would
Speaker 1: take the cell side, So the publisher ad server, so
Speaker 1: all the different websites that are out there across the web,
Speaker 1: they would take their inventory and say hey, I've got
Speaker 1: this ad impression. I'm requesting somebody to bid on it,
Speaker 1: and then Google could handle the bid because of its demand,
Speaker 1: but other parties could come into and bid and they
Speaker 1: would decide the highest bid.
Speaker 2: So how are they using this as a monopolis? Then?
Speaker 2: Where is the other than being on every single transaction?
Speaker 2: Are they doing anything else to basically intervene and drive
Speaker 2: up price?
Speaker 1: Well, I mean, the couple of the main themes that
Speaker 1: are going on throughout the entire week is that that
Speaker 1: ad X, which is the exchange, Google takes twenty percent
Speaker 1: of the revenue and they've never had to come off
Speaker 1: of that price.
Speaker 3: And so.
Speaker 1: Like the CEOs of like index Exchange and these other
Speaker 1: exchanges that are out there were testifying and they charge
Speaker 1: like half of.
Speaker 3: What Google charges, sometimes even as low as five percent.
Speaker 1: Andrew Casally, the CEO of index Exchange, that they actually
Speaker 1: went down to zero and they weren't able to take
Speaker 1: away business from Google. So Google is able to keep
Speaker 1: that twenty percent and extract monopoly rents. According to one
Speaker 1: of their own internal health to give me emails go ahead.
Speaker 2: Forgive my ignorance here. But how do they extra like
Speaker 2: is it that just there's a bunch of ad inventory
Speaker 2: that Google only has access to.
Speaker 3: It's it's the opposite of it. It's actually it's the.
Speaker 1: That you can only have access to the demand, the
Speaker 1: AD spend that Google has if you're using ad X,
Speaker 1: so that AD demand won't travel through any other exchange.
Speaker 2: And why is that?
Speaker 1: Is it just because it's a decision by Google and
Speaker 1: so yeah, so they made the decision to only allow
Speaker 1: their demand to go through ADX.
Speaker 2: So what's stopping people from building their own ad X.
Speaker 1: There's other exchanges out there that try to compete with
Speaker 1: with add x, but they're not able to because they
Speaker 1: can't get access to all the AD demand and that spend.
Speaker 1: It's that critical, and everybody wants to stay on ad X,
Speaker 1: and Google has then advantages which we can.
Speaker 3: Go through because of the way the ad X operates.
Speaker 2: That's one of those advantages.
Speaker 3: Then you know that.
Speaker 1: I think the biggest one that was part of the
Speaker 1: opening statements is what's now last look they call it.
Speaker 1: You know, there was something called first look, which was
Speaker 1: really before a real before the auction's really opened up
Speaker 1: with header bidding, and first looks kind of just the
Speaker 1: simplify It's basically if you put in if a publisher
Speaker 1: said Hey, I've got this ad unit and I'm willing
Speaker 1: to sell it to anybody, and the floor the lowest
Speaker 1: price i'll sell it for is five dollars. Then Google
Speaker 1: always had the chance to say I'll take it before
Speaker 1: it even goes into the auction. They could say they
Speaker 1: had first look, and they could just say I'll take
Speaker 1: it for five dollars and a penny basically before they
Speaker 1: even put it in the auction. And over time that
Speaker 1: transitioned into something called last look, so that when auctions
Speaker 1: started to open up because of their privileged position that
Speaker 1: Google had, they had something called last look, where after
Speaker 1: all the auction took place, they could then look at
Speaker 1: the winning bid and decide if they wanted to beat
Speaker 1: it by another penny.
Speaker 2: Oh, so they can literally just rig the dice pretty
Speaker 2: much as they want.
Speaker 3: Like it. I mean, that's the way it's I mean,
Speaker 3: that's the reading in the room.
Speaker 1: And it's interesting because you know, I think one of
Speaker 1: the biggest questions always going into this trial was, you know,
Speaker 1: it was originally gonna be a jury, now it's a
Speaker 1: this judge bring them a was you know, can you
Speaker 1: explain these live high speed trading auctions of ad tech,
Speaker 1: you know, to the average American, and they're doing a
Speaker 1: really good job explained. I think the judge gets it,
Speaker 1: the people in the room get it, and you know,
Speaker 1: I think Last Look was one of the better examples
Speaker 1: where the Justice Department and their opening statement described it
Speaker 1: as kind of like a classic silent auction where every
Speaker 1: party writes down their bid on the slip of paper.
Speaker 3: It's in a sealed envelope, and you only get to
Speaker 3: bid ones.
Speaker 1: And then at the end of the auction, Google gets
Speaker 1: to peek into the envelope see what the highest bid
Speaker 1: is and say, you know, I'll pay a penny higher.
Speaker 2: For that, And so Google gets the big twice where
Speaker 2: everyone else gets to bid ones.
Speaker 1: Essentially, that's essentially what happens, right, and so they get
Speaker 1: to pick off wherever they think there's additional value because
Speaker 1: of the quality of the impression.
Speaker 2: And this is in the tool that lets you let's
Speaker 2: publish a sell adspace, right, Yeah.
Speaker 3: It's basically what it's called an SSP.
Speaker 1: It's the supply side platform that takes their inventory puts
Speaker 1: it out for auctions.
Speaker 2: So as as you're finding from my litany of very
Speaker 2: simple questions, this stuff is pretty complex. Is the judge
Speaker 2: getting it?
Speaker 3: I think she is.
Speaker 2: Yeah.
Speaker 1: I mean they're you know, they're they're coming up with
Speaker 1: I think, simple ways to explain it. She's she seems
Speaker 1: sharp as attack and she's you know, fair as can be.
Speaker 1: I mean, she runs a court room like I've never seen.
Speaker 1: But the technical aspects of it, I think they're going
Speaker 1: as deep as they really need to. And you know,
Speaker 1: they had an expert witness in Carnegie Mellon computer science
Speaker 1: professor doctor Robbie and he did a really good job
Speaker 1: of of with some visuals of explaining the kind of
Speaker 1: the three or four kind of most important ways in
Speaker 1: which they were quote unquote rigging or allegedly rigging the auctions.
Speaker 3: And he kind of walked through each of those and
Speaker 3: it was it was easy to follow.
Speaker 2: And what was his testimony Exactly what did he get into.
Speaker 1: Well, he walked through that that last look and why
Speaker 1: that was so important as an example that we just
Speaker 1: talked about. He talked through something called dynamic revenue sharing,
Speaker 1: which is a pretty big advantage that Google just gave
Speaker 1: itself in addicts also where you know, they the way
Speaker 1: he testified was that Google recognized and there's there's tons
Speaker 1: of emails that they put up that back this up.
Speaker 1: So it's not or maybe past the stage of having
Speaker 1: to say their allegations because there was evidence going up
Speaker 1: on screens. But what they did was, you know, Google
Speaker 1: takes twenty percent, as I mentioned, of the transactions that
Speaker 1: go through addicts, and so the other eighty percent goes
Speaker 1: to the publisher. So in simple terms, if it's a dollar,
Speaker 1: if it's a dollar transaction, Google's going to take twenty cents,
Speaker 1: the Publisher's.
Speaker 3: Going to take eighty cents.
Speaker 1: And what they did was they said, you know what,
Speaker 1: if we've got this last look and we know that
Speaker 1: somebody else is going to win this ad at eighty
Speaker 1: one cents, because we're only going to get eighty cents
Speaker 1: across to the publisher, why don't we take our revenue
Speaker 1: share down off twenty percent to fifteen percent and.
Speaker 3: So then we'll win out and eighty five cents will
Speaker 3: go through and will win the bid.
Speaker 1: And so, in Google's own words, in their own email,
Speaker 1: they described it as just another way to exploit the
Speaker 1: fact that they had last look. So we've got this
Speaker 1: last look, why don't we come off of our twenty
Speaker 1: percent share if it allows us to win the impression,
Speaker 1: and so that's a way to take. You know, it
Speaker 1: didn't actually drive that much more revenue through, but what
Speaker 1: it did was it gave them a lot more volume
Speaker 1: and activity. A lot more of the bids were won
Speaker 1: through their exchange rather than the other competitive exchanges that
Speaker 1: were out there.
Speaker 3: If that makes sense.
Speaker 2: It does. So you talk about them needing addicts to
Speaker 2: like forgive me in for sense to this book. The
Speaker 2: demand that they have, that's really their secret source, the
Speaker 2: demand that they can source. Why is an Why can't
Speaker 2: anyone else get that kind of demand? What is it
Speaker 2: that's stopping them?
Speaker 3: Well it starts.
Speaker 1: That's where this is interesting because it kind of starts
Speaker 1: with the search trial that they just won last month, right,
Speaker 1: and so that remember the the other case over in
Speaker 1: DC was that Google has monopoly power over search text
Speaker 1: advertising too, and so they've got this platform in which
Speaker 1: advertiser going into buy ads in which they've got monopoly power.
Speaker 3: And so trying to convince you know a lot of smaller.
Speaker 1: Business advertisers out there, small market advertisers to go through
Speaker 1: another platform is in itself difficult. There's friction there, and
Speaker 1: so everybody spends money on Google already, and so they
Speaker 1: already come in with that massive advantage, and.
Speaker 2: It's it's more expensive to use other platforms, is it
Speaker 2: more burdensome to set up with them?
Speaker 1: You know, we haven't really got into the quality of
Speaker 1: the buyside platforms. They seem, you know, to be discribed
Speaker 1: as relatively comparable. So it's more a matter of having
Speaker 1: one central, you know, interface in which you're buying. So
Speaker 1: but it's clearly, you know that money is going to
Speaker 1: be coming through from the Google site no matter what,
Speaker 1: that's going to go to Google's platforms is going to
Speaker 1: go to the wider web. And so they just walk
Speaker 1: in with a massive advantage on the demand side. And
Speaker 1: so the real, you know, the real challenge is that
Speaker 1: that or the issue is that demand should be able
Speaker 1: to go to other exchanges, not just to Googles. And
Speaker 1: that's where I think Google's trying to set up its
Speaker 1: defense is that that they shouldn't have to connect their
Speaker 1: demand to other platforms.
Speaker 3: There's no there's no issue with well, we'll get to
Speaker 3: the legal piece of it, the.
Speaker 2: Good Yeah, even though that seems a perfectly reasonable thing
Speaker 2: to say for anything like this, right connecting. So is
Speaker 2: this suggesting that all Google so do all Google properties
Speaker 2: run through at X, Like you can't buy advertising on
Speaker 2: Google Ads without going through at.
Speaker 1: X, can't buy now, So I'm sorry to Yeah, I
Speaker 1: wish I had my visuals we're talking, but you can't
Speaker 1: if the advertising demand on the buy side on Google
Speaker 1: that has to go through ad X in order to
Speaker 1: go to other publishers.
Speaker 3: And so right, yeah, I think that's the same thing
Speaker 3: you were saying.
Speaker 2: So, yes, Britty, and that demand is coming from advertisers,
Speaker 2: as in people who want to advertise on different platforms,
Speaker 2: that's right, But then it goes through ad X and
Speaker 2: then Google basically gets the monkey with at the beginning
Speaker 2: of the end of it. It's just it feels fairly,
Speaker 2: fairly crooked.
Speaker 1: That's the feeling when you're sitting in the room. It
Speaker 1: very much does. And there's a lot of, you know,
Speaker 1: emails from Google employees where you can tell they feel
Speaker 1: like this might be a little crooked, you know.
Speaker 2: So there was the thing The Verge quoted a particular
Speaker 2: witness and news corp that seemed quite interesting who said
Speaker 2: she felt like they were being held hostage by Google.
Speaker 3: Did you I did? Yeah, she was, she was really
Speaker 3: see laser. She no longer is with news courts. She's
Speaker 3: actually at Amazon now, which is interesting.
Speaker 1: But she she gave really clear evidence and testimony, and
Speaker 1: you know, she she was explaining how there was really
Speaker 1: no choice to use any platform but DFP as their
Speaker 1: ad server, and therefore with it, it comes with all
Speaker 1: these other obligations. And you know, the one thing that
Speaker 1: Google did that she seemed to really not like was
Speaker 1: there is a point that was important in time where
Speaker 1: Google ted to publishers you can no longer have floors
Speaker 1: price floors on individual exchanges.
Speaker 3: So yeah, what does that mean?
Speaker 1: Essentially, if you're a publisher, if you're a website and
Speaker 1: you're saying, I have this AD that's available, and I
Speaker 1: will allow five different exchanges to put forward their highest
Speaker 1: bid for it.
Speaker 2: And when you say AD available, you mean like space
Speaker 2: on a website too.
Speaker 3: They can add banner on their homepage.
Speaker 1: Yeah, so a banner on their homepage and they're making
Speaker 1: it available to let's say five different exchanges. One of
Speaker 1: those is ad X, but then let's say also Pobmatic
Speaker 1: and Rubicon in exchange, these various SSP's we call them.
Speaker 4: And for a while you could actually set a price
Speaker 4: floor essentially the lowest price you were willing to sell
Speaker 4: that banner on the homepage, and you could set it
Speaker 4: individually based on the exchange.
Speaker 1: So what publishers were often doing was they were putting
Speaker 1: a higher price floor for ad X, for Google, for
Speaker 1: add X for a number of reasons, you know. And
Speaker 1: some of those reasons included wanting to diversify so not
Speaker 1: all the revenue and spend was coming from Google because
Speaker 1: that could create risk as we see. They also wanted
Speaker 1: to manage the quality of the ads because sometimes the
Speaker 1: ads is a high quality coming through at X. So
Speaker 1: by having a higher price point, it kind of weeded
Speaker 1: out some of the garbage. And so there there are
Speaker 1: a number of reasons. And at this moment in time,
Speaker 1: Google said, you know what, you now need to have
Speaker 1: a universal price floor across everyone, and that basically gave
Speaker 1: ad X the same, you know, the same advantage, made
Speaker 1: sure it had the same price floor as everyone else.
Speaker 2: But how do they maintain a price floor across other platforms,
Speaker 2: Like how did they just say if you violate this,
Speaker 2: you're off of our ad platform.
Speaker 3: Well, it all it's because again DFP, the ad server
Speaker 3: is also Google, so it's the source of truth. Yeah.
Speaker 2: So they so they own the place where ads negotiate,
Speaker 2: the place where ads come from, and then the server
Speaker 2: that puts the ads on places bing go. That's really
Speaker 2: that's good.
Speaker 3: That seems that seems like if you can, if you
Speaker 3: can keep it right.
Speaker 2: Yeah, but that might be a problem for them. So
Speaker 2: whether on the other really cool like publisher witnesses interesting people.
Speaker 2: So on the publisher side for listeners, we're just saying
Speaker 2: that's the people putting ads up. Sorry, they're the ones
Speaker 2: providing at inventory.
Speaker 1: Yeah, you know, we heard from Gannette was awesome. He
Speaker 1: was actually the first witness Gannet, the big newspaper company.
Speaker 1: They're head of their ad operations group. That was the
Speaker 1: very first witness on Monday. You know, he really set
Speaker 1: up the some of the basic foundation of the case. So,
Speaker 1: you know, I think it was enough.
Speaker 3: Really from the publisher side.
Speaker 1: Now we're actually deeper in the weeds of the conduct
Speaker 1: issues and some of these like you know, the revenue
Speaker 1: sharing were going through and some of these other games
Speaker 1: that they played. You know, I think the most actually
Speaker 1: the most interesting one, if I can digress for a second,
Speaker 1: the revenue the dynamic revenue sharing where they would come
Speaker 1: off the twenty percent and drop down. They actually came
Speaker 1: out with dynamic revenue Sharing two, where they seemed to
Speaker 1: realize that, you know, it was hurting their margins coming
Speaker 1: down off twenty percent in order to win the transaction,
Speaker 1: so they decided they would also go higher than twenty
Speaker 1: percent when they had a high enough bid already, and
Speaker 1: that would allow them to recoup that margin. And so
Speaker 1: they essentially described it as a bank in which they
Speaker 1: could as the expert would have said, he described it
Speaker 1: as imposing a debt on the publishers, where basically Google
Speaker 1: would say, you know what, We're going to go offer
Speaker 1: take less than twenty percent revenue share in order to
Speaker 1: win and add but then we're going to go ahead
Speaker 1: and hold a little debt for you publisher, and we're
Speaker 1: going to take that money back later on and pay
Speaker 1: ourselves back.
Speaker 2: Wait, so when they came up, so when they reduced
Speaker 2: their car to win a bit, they would then take
Speaker 2: the remainder of the car that they had lost and
Speaker 2: then charge the people they were meant to give money.
Speaker 2: So the place where the app was going.
Speaker 1: Yes later but later on, so you know, maybe they
Speaker 1: one ad goes through at a fifteen percent revenue share,
Speaker 1: that they came down off twenty percent in order to
Speaker 1: win that transaction, and then maybe the next time an
Speaker 1: AD went through on that site they would.
Speaker 3: Take you know, twenty four percent or whatever it is
Speaker 3: in order to pay themselves back.
Speaker 2: How did how the odd my friends, or how the
Speaker 2: fuck is that lead? Like? What the that's insane?
Speaker 1: Well, that's what we're going to find out, right, I mean,
Speaker 1: imposing a debt on publishers. I wrote that down in
Speaker 1: my notebook as soon as he said it, because I
Speaker 1: was thinking.
Speaker 3: Yeah, that's what that is. And so if the publisher didn't.
Speaker 1: Know that that debt was being imposed on them, or
Speaker 1: if it was unclear or they were being misled, which
Speaker 1: seems to be the case often, then you know, that's
Speaker 1: significant harm to the publishers. It's it's bit we're talking
Speaker 1: billions of dollars if it's a matter of twenty percent
Speaker 1: versus eighteen percent, you know, coming down off that number.
Speaker 2: So are there any other harms they've discussed otherwise that
Speaker 2: Google's actions of harmed others?
Speaker 1: Well, I mean certainly there's been harm to the other
Speaker 1: ad exchange, to the other add tech companies too that haven't.
Speaker 3: Been able to compete because of that monopi power.
Speaker 1: We haven't really seen from the buy side yet in
Speaker 1: terms of, you know, how it affects the advertisers.
Speaker 3: We had two different.
Speaker 1: Ad agcy executives testify, you know, it was good, it
Speaker 1: was solid, it was kind of foundational. But I want
Speaker 1: to really see the just department connect the dots still
Speaker 1: on how those harmed advertisers, because it's you know, it's
Speaker 1: fairly clear that Google's going to, as its defense, say
Speaker 1: you know what, we made a market that yes, we
Speaker 1: dominate the buy side the cell side, and we control
Speaker 1: the auctions and we do all these funny business games,
Speaker 1: but we do it to be more efficient and you know,
Speaker 1: and our advertisers are all happy, and so what's the
Speaker 1: harm that's I mean, that's clearly where they're going.
Speaker 3: And so I think those dots need to be connected
Speaker 3: a bit.
Speaker 2: It feels like they can't really say that that's the
Speaker 2: case though, because the way this harms advertises is this
Speaker 2: must raise prices or at least manipulate them to benefit Google.
Speaker 1: Yeah, I mean there's there's a boat that and then
Speaker 1: you know what we don't know too and I think,
Speaker 1: you know, there will be one or two economists that
Speaker 1: will probably have testify next week, and I think that's
Speaker 1: the part that they'll also land in.
Speaker 2: Has anyone from Google kind of like said anything? Has that?
Speaker 2: Have they managed to get anyone to flip on the
Speaker 2: Google side?
Speaker 1: There was only only one of the ex employees. I
Speaker 1: think all the ex employees were somewhat damaging, but only
Speaker 1: one of them that was I think really sympathetic and
Speaker 1: the case and uh, he just seemed to have no
Speaker 1: love for for the He called it the machine for he.
Speaker 3: Would describe like where he knew things were not right.
Speaker 1: They were they were not doing the right thing as
Speaker 1: a company, and his colleagues would agree, and then they
Speaker 1: would propose a change, and then it would get denied.
Speaker 1: It would come back from the machine and the people
Speaker 1: on the other side, he said, that would overrule what
Speaker 1: they wanted to do. He never figured out who was
Speaker 1: on the other side. He said, he'd kind of comment
Speaker 1: on it. I never really knew where that decision was
Speaker 1: coming from, but it would come back as a no.
Speaker 3: And so that was I Lipki was yeah, good, good call.
Speaker 2: Yes, Oh yeah, So that's what I'm here for. It's
Speaker 2: it's really funny because all of this has been going
Speaker 2: on decades. That's what really astonishes me. This isn't even
Speaker 2: subtle what's going on. I haven't really dug too deeply
Speaker 2: and I know why will into the discovery and actually
Speaker 2: have they been providing a bunch of intal So you
Speaker 2: said there's a bunch of emails that been in lots
Speaker 2: of them.
Speaker 3: There's been a lot, a lot of new documents.
Speaker 1: Yeah, a lot of emails and I'd say about twenty
Speaker 1: or thirty are going up on the department site per day.
Speaker 3: And I think I mentioned on our opening session, but
Speaker 3: USV Google.
Speaker 1: Ads dot Com has all the exhibits and they're all searchable,
Speaker 1: et cetera. They're doing a great job managing that. But
Speaker 1: you know, there's a lot of material. And the other
Speaker 1: thing that is happening, because we talked about it on
Speaker 1: the first show, is they're really landing the bus part
Speaker 1: is really landing that there is evidence that we're not seeing.
Speaker 1: And so they've asked a number of the ex Google
Speaker 1: employees about having their chats automatically deeply lead after twenty
Speaker 1: four hours and why they didn't honor the litigation hold
Speaker 1: and the judge leaned in several times on that where
Speaker 1: she asked questions of the witness and said, why, you know,
Speaker 1: when did you get this litigation hold? Why didn't you
Speaker 1: preserve your chats? What did you understand? And so I
Speaker 1: think that's also going to hang over.
Speaker 3: Them the rest of the trial.
Speaker 2: And has that been a consistent theme because I did, Yeah,
Speaker 2: I did see a message with friend of the show,
Speaker 2: pravagar Ragavan saying responding to someone and saying, oh wait,
Speaker 2: this chat's on the record, which is so bad.
Speaker 3: That's really bad.
Speaker 1: That's really bad. Well, yeah, it's a consistent theme. And
Speaker 1: I would get lightly if I were Google. And because
Speaker 1: you know, she already said that she was gonna affect
Speaker 1: the credibility of every witness, and so you've got Isazar.
Speaker 1: We mentioned a guy named Chris Lsala who ran their
Speaker 1: publisher operations globally testified this morning Brad Bender a couple
Speaker 1: of days ago.
Speaker 3: These are former employees and.
Speaker 1: So you know, even though they weren't I think, really
Speaker 1: damaging as witnesses. I think the judge also knows she didn't.
Speaker 1: We're not seeing everything probably so and she has to
Speaker 1: make that inference.
Speaker 3: And then on top of that.
Speaker 1: I think the first witness every day next week is
Speaker 1: also a Google employee. I mean Monday is Monday at
Speaker 1: nine am, will be Neil Mohan, who was the CEO
Speaker 1: of double Click when they sold it to Google. He
Speaker 1: was the he brought the deal in and he continued
Speaker 1: to run it for quite some time. And now he's
Speaker 1: the CEO of YouTube.
Speaker 3: So so I think there'll be a.
Speaker 1: Really important witness. He's probably one of the guys on
Speaker 1: the other side that you know, the machine could.
Speaker 2: So right now, the Department of Justice is making the case.
Speaker 2: How long left do we have of that before Google
Speaker 2: gets to make their I.
Speaker 1: Would have to imagine at least another week to week
Speaker 1: and a half and then Google will have another week
Speaker 1: or so probably for their defense and we'll get to
Speaker 1: closing arguments by the first week of October.
Speaker 2: Very cool. And how do you think that the Development
Speaker 2: of Justice is making the case convincingly?
Speaker 3: I think they are. Yeah.
Speaker 1: I mean Google's strategy in the beginning seemed to be confusion.
Speaker 1: It was both to try to confuse the market, that's
Speaker 1: not three markets. They've tried to argue that the display
Speaker 1: ads are the same as TikTok ads and Facebook ads
Speaker 1: and they've lost that. And the opening statement that they did,
Speaker 1: which I think it got some reporting on this. It
Speaker 1: was Karen Dunn, who's their lead defense attorney from Paul Weitz.
Speaker 1: She did the opening statement for half an hour and
Speaker 1: she just really tried to sandwich in just she ran
Speaker 1: out of time and had.
Speaker 3: To cut on the fly.
Speaker 1: Just a lot of technical terms and a lot of
Speaker 1: jargon from the industry. I think they try to confuse
Speaker 1: the judge up front. She got some pressed because interesting enough,
Speaker 1: she ran out of the room as soon as she
Speaker 1: finished at whatever was ten am on Monday, she ran
Speaker 1: out of the room to go because she was also
Speaker 1: the lead advisor and coach for Kamala Harris for the debate,
Speaker 1: and so she literally she opened up on Monday and
Speaker 1: she's leading the defense and then she also was helping
Speaker 1: to prep Kamala.
Speaker 3: So busy woman.
Speaker 2: Yeah, so, I mean, kind of exciting, but also it
Speaker 2: doesn't feel like Google is particularly well prepared for this.
Speaker 2: I guess we'll see more in the defense, but it
Speaker 2: doesn't seem like that plan is anything other than let's
Speaker 2: confuse as much as humanly possible.
Speaker 3: Yeah, I mean, I think I think that is my
Speaker 3: read eye it too.
Speaker 1: I think it's a good readout, even though they had
Speaker 1: four years, I think because the state ag filed back
Speaker 1: in twenty twenty, so they've had time to work through
Speaker 1: their defense on this. But I think ultimately it's going
Speaker 1: to come down to a legal issue. They're trying to
Speaker 1: make the case about something that's called refusal to deal,
Speaker 1: which there's some Supreme Court precedent on that they shouldn't
Speaker 1: have to provide APIs or do deals with their rivals.
Speaker 1: But with the monopoly power that they have, I don't
Speaker 1: think that that's really the that's not the case. It's
Speaker 1: a tying case where they're saying you can't have our
Speaker 1: advertising demand unless you use these.
Speaker 3: Other products where we also have monopoly power, and that's
Speaker 3: I think that'll be enough for the just Department to win.
Speaker 2: Also kind of feels like an argument that you could
Speaker 2: win much better if it didn't seem like you were
Speaker 2: deleting all this stuff.
Speaker 3: That's exactly right, but the last smoke in the room
Speaker 3: for sure.
Speaker 2: So well, Jason, thank you so much for joining us
Speaker 2: again for this. Where can people find you?
Speaker 1: You can find me on Twitter's probably easiest Jason underscore
Speaker 1: Kent KNT and I always look for vback okay.
Speaker 2: And also go to usv Google ads dot com And
Speaker 2: if any of this was slightly confusing, they have an
Speaker 2: incredible trial resources bit with a glossary of terms with
Speaker 2: ad tech explainers, I know, listeners. This is a lot.
Speaker 2: It's a lot for me, and I'm steeped in this
Speaker 2: crap all the time. But the people running usv Google
Speaker 2: who was actually running that, Jason, do you know?
Speaker 1: It's a coalition. But there's a group called check my
Speaker 1: Ads that's taking lead on it. And I appreciate the
Speaker 1: other mention of it because they're just doing a phenomenal job.
Speaker 2: They really are, and also genuinely a lot of people
Speaker 2: I would argue this is undercovered in the tech industry
Speaker 2: just because this is the biggest thing happening in tech.
Speaker 1: It is, and there's literally like three hundred billion dollars
Speaker 1: of advertising spend you know that goes through through Google.
Speaker 3: So it's what pays for all this journalism.
Speaker 1: I also should mention because it's different than the search
Speaker 1: trial that the National Press, New York Times, Washington Post, CNN,
Speaker 1: they were all there on the first day, the wire
Speaker 1: services were all there, the DC groups like Mlex and
Speaker 1: Capital Form were there, but also the industry kind of
Speaker 1: advertising trade press at Week, Digital Business Insider, marketing.
Speaker 3: Brew and at exchange you We're all there.
Speaker 1: There must have been thirty reporters there, many of them
Speaker 1: were there the whole week, and there were ten cameras.
Speaker 3: I counted outside of the courthouse, and so that actually
Speaker 3: was a live attention on it, which is wonderful, which.
Speaker 2: Is great, and I think everyone please go and check
Speaker 2: out USB, Google Ads, go check out Jason, and you
Speaker 2: can check out my various stuff that you'll hear in
Speaker 2: a recorded clip off of this. Thank you for listening, Ei,
Speaker 2: Thank you for listening to Better Offline. The editor and
Speaker 2: composer of the Better Offline theme song is Metasowski. You
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