WEBVTT - The Department of Justice V Google Ads: Part 2 0:00:02.440 --> 0:00:04.000 Also media. 0:00:05.280 --> 0:00:17.479 Hello and welcome to Betrofline. I'm your host ed Ze Trones. 0:00:20.280 --> 0:00:24.000 I am joined by Jason Kent, once again, the CEO DCN. 0:00:24.320 --> 0:00:27.000 We'll be telling us more about the first week of 0:00:27.120 --> 0:00:30.360 the Department of Justice versus Google ads. Jason, thank you 0:00:30.360 --> 0:00:31.360 so much for joining. 0:00:31.320 --> 0:00:33.160 Thanks for having me back edm thrilled to be here. 0:00:33.479 --> 0:00:36.199 So what's been happening since we lost spoke? How did 0:00:36.200 --> 0:00:36.879 the first week go? 0:00:37.880 --> 0:00:41.199 It's a blur. I mean, it's an impressive operation. I 0:00:41.200 --> 0:00:44.400 think we talked about how this district is known as 0:00:44.440 --> 0:00:47.520 the Rocket Docket and that's how they got from from 0:00:47.520 --> 0:00:49.879 filing a complaint to actual trial in like a year 0:00:49.880 --> 0:00:52.400 and a half. So it has that reputation and you 0:00:52.479 --> 0:00:55.080 kind of we saw it in action this week. I 0:00:55.080 --> 0:00:57.680 mean every day we started at nine am sharp, like 0:00:57.800 --> 0:01:01.080 clockwork until six pm with you know, three or four 0:01:01.120 --> 0:01:02.920 senior executives testified every day. 0:01:03.800 --> 0:01:05.040 And who's testified so far? 0:01:06.720 --> 0:01:10.119 Three or four ex Google employees. We've heard from. 0:01:10.160 --> 0:01:14.039 We've had CEOs of all the major ad tech companies, 0:01:15.120 --> 0:01:17.520 Andrew Casally from Index Exchange see. 0:01:17.400 --> 0:01:24.400 What magnite and Ruba Khan actually it's now called Magnite. 0:01:24.440 --> 0:01:26.319 And then well, else do we hear from? 0:01:26.319 --> 0:01:30.120 We heard two different publishers executives, so we kind of 0:01:30.160 --> 0:01:33.639 gone down the list. We've had one expert witness, computer 0:01:33.680 --> 0:01:35.360 science professor from Carnegie Mellon. 0:01:35.600 --> 0:01:39.880 So and so is this currently the Department of Justices case? Like, 0:01:39.920 --> 0:01:42.000 it's them them laying out that's your case. 0:01:42.200 --> 0:01:44.160 Yeah, yeah, this is what they call their case in 0:01:44.240 --> 0:01:46.759 chief and they'll take probably about I think two weeks 0:01:46.760 --> 0:01:48.720 and then Google have a chance to defend itself. 0:01:49.120 --> 0:01:51.600 So what's the thrust of their argument other than they 0:01:51.640 --> 0:01:52.400 have a monopoly. 0:01:52.960 --> 0:01:55.040 Well, let's say you know that there are three different 0:01:55.080 --> 0:01:58.440 markets at work here that that they have a monopoly in, 0:01:58.600 --> 0:02:00.800 so you you know, some of the back and forth 0:02:00.960 --> 0:02:04.640 is still Google trying to break that apart and blur 0:02:05.360 --> 0:02:07.840 into one single kind of two side and market they 0:02:07.880 --> 0:02:11.959 call it. But but the Justice Department is their complaint 0:02:12.040 --> 0:02:15.280 is that again that there's three markets. There's the cell side, 0:02:15.680 --> 0:02:18.320 there's the ad exchange, and then there's the buy side. 0:02:19.120 --> 0:02:22.360 Google in their opening statement has already tried to make 0:02:22.400 --> 0:02:25.600 the into one market that's a two sided market, trying 0:02:25.600 --> 0:02:29.360 to lean into a prior Supreme Court decision that involved 0:02:29.360 --> 0:02:32.400 American Express. I don't I don't think they'll have much 0:02:32.400 --> 0:02:36.440 success there. But once you get past proving that there's 0:02:36.480 --> 0:02:40.959 three markets there and that they've got monopoly power in them, 0:02:41.440 --> 0:02:44.680 then it's also a tying argument that they've used one 0:02:44.800 --> 0:02:47.040 of them, one of those to build up and maintain 0:02:47.120 --> 0:02:52.160 market power through through bad conduct to do that. 0:02:52.280 --> 0:02:54.880 So don me if I break me down those three 0:02:55.000 --> 0:02:57.840 parts then and then we can get into the A grade. 0:02:58.160 --> 0:03:01.880 Sure. So the the publisher side, the cell side. 0:03:02.400 --> 0:03:05.200 Google has the product that a lot of people still 0:03:05.200 --> 0:03:08.040 know as as DFP, which came from their Double Double 0:03:08.080 --> 0:03:13.720 Click acquisition. So that's the publisher ad server, and according 0:03:13.760 --> 0:03:17.840 to the Just Department's opening statement, they've got like ninety 0:03:17.960 --> 0:03:22.079 one percent of the market share for the publisher side. 0:03:22.480 --> 0:03:24.720 And a publisher in this case is like a website 0:03:24.880 --> 0:03:28.000 and be like a website the show's Google ads. 0:03:27.760 --> 0:03:31.960 On them exactly, And so that's the server that's it's 0:03:32.040 --> 0:03:33.560 kind of the sort I guess what you call the 0:03:33.600 --> 0:03:35.520 source of truth. We've always called it, but it's the 0:03:36.120 --> 0:03:39.400 it's the ad server that says, hey, I've got this AD, 0:03:40.520 --> 0:03:42.880 and then it takes care of deciding who wins it 0:03:42.920 --> 0:03:46.480 and ultimately rendering and serving the ad and then actually 0:03:46.520 --> 0:03:48.760 dealing with all the accounting. 0:03:48.400 --> 0:03:50.280 And inventory projections, et cetera. 0:03:51.280 --> 0:03:54.080 So that's that's the what's the cell side of the 0:03:54.360 --> 0:03:57.680 of this auction market as real time auction market. And 0:03:57.720 --> 0:04:00.160 then to go to the other side, you've got on 0:04:00.200 --> 0:04:05.760 the buy side. Google has their ad demand that they 0:04:05.800 --> 0:04:09.400 have through their ad network that they also have I 0:04:09.440 --> 0:04:11.920 think the just Department's arguing they have like eighty some 0:04:12.040 --> 0:04:17.120 percent of that market. That's really important because a lot 0:04:17.120 --> 0:04:21.080 of the arguments are that you couldn't use other products 0:04:21.080 --> 0:04:22.080 and still have access to. 0:04:22.040 --> 0:04:24.279 That Google demand, and so they use that. 0:04:24.760 --> 0:04:29.040 Advertising demand of advertisers that want to spend money in 0:04:29.200 --> 0:04:33.800 order to ensure that everyone else stays on their supply chain. 0:04:34.279 --> 0:04:38.800 And then in the middle is the ad exchange which 0:04:38.920 --> 0:04:43.839 Google is called ad X, and that's the exchange that 0:04:44.120 --> 0:04:48.080 acts as the ability to take in bids. 0:04:49.200 --> 0:04:51.320 Of that ad inventory and then clear them. 0:04:51.320 --> 0:04:54.720 And so it's the place where Google sells ads on 0:04:54.800 --> 0:04:55.919 Google to Google. 0:04:56.640 --> 0:04:59.800 No, it's the ad X would be the what would 0:04:59.839 --> 0:05:03.839 take the cell side, So the publisher ad server, so 0:05:03.960 --> 0:05:06.360 all the different websites that are out there across the web, 0:05:06.680 --> 0:05:08.960 they would take their inventory and say hey, I've got 0:05:08.960 --> 0:05:12.640 this ad impression. I'm requesting somebody to bid on it, 0:05:13.160 --> 0:05:17.560 and then Google could handle the bid because of its demand, 0:05:17.640 --> 0:05:21.240 but other parties could come into and bid and they 0:05:21.240 --> 0:05:22.560 would decide the highest bid. 0:05:23.640 --> 0:05:26.040 So how are they using this as a monopolis? Then? 0:05:26.080 --> 0:05:29.080 Where is the other than being on every single transaction? 0:05:29.600 --> 0:05:33.600 Are they doing anything else to basically intervene and drive 0:05:33.680 --> 0:05:34.119 up price? 0:05:35.120 --> 0:05:38.480 Well, I mean, the couple of the main themes that 0:05:38.520 --> 0:05:41.040 are going on throughout the entire week is that that 0:05:41.160 --> 0:05:45.479 ad X, which is the exchange, Google takes twenty percent 0:05:46.040 --> 0:05:48.920 of the revenue and they've never had to come off 0:05:48.920 --> 0:05:49.600 of that price. 0:05:50.320 --> 0:05:51.960 And so. 0:05:53.880 --> 0:05:56.760 Like the CEOs of like index Exchange and these other 0:05:56.839 --> 0:06:00.000 exchanges that are out there were testifying and they charge 0:06:00.279 --> 0:06:00.960 like half of. 0:06:00.880 --> 0:06:04.400 What Google charges, sometimes even as low as five percent. 0:06:05.080 --> 0:06:07.479 Andrew Casally, the CEO of index Exchange, that they actually 0:06:07.480 --> 0:06:10.159 went down to zero and they weren't able to take 0:06:10.240 --> 0:06:13.400 away business from Google. So Google is able to keep 0:06:13.440 --> 0:06:18.400 that twenty percent and extract monopoly rents. According to one 0:06:18.440 --> 0:06:21.000 of their own internal health to give me emails go ahead. 0:06:20.760 --> 0:06:23.599 Forgive my ignorance here. But how do they extra like 0:06:23.720 --> 0:06:25.880 is it that just there's a bunch of ad inventory 0:06:25.880 --> 0:06:27.440 that Google only has access to. 0:06:28.160 --> 0:06:31.000 It's it's the opposite of it. It's actually it's the. 0:06:32.720 --> 0:06:38.000 That you can only have access to the demand, the 0:06:38.080 --> 0:06:43.440 AD spend that Google has if you're using ad X, 0:06:44.000 --> 0:06:47.280 so that AD demand won't travel through any other exchange. 0:06:47.800 --> 0:06:48.560 And why is that? 0:06:48.720 --> 0:06:51.760 Is it just because it's a decision by Google and 0:06:51.839 --> 0:06:55.240 so yeah, so they made the decision to only allow 0:06:55.279 --> 0:06:56.839 their demand to go through ADX. 0:06:57.320 --> 0:07:01.680 So what's stopping people from building their own ad X. 0:07:03.160 --> 0:07:05.719 There's other exchanges out there that try to compete with 0:07:05.720 --> 0:07:08.719 with add x, but they're not able to because they 0:07:08.800 --> 0:07:12.320 can't get access to all the AD demand and that spend. 0:07:12.320 --> 0:07:16.960 It's that critical, and everybody wants to stay on ad X, 0:07:17.000 --> 0:07:20.440 and Google has then advantages which we can. 0:07:20.360 --> 0:07:23.640 Go through because of the way the ad X operates. 0:07:23.800 --> 0:07:26.040 That's one of those advantages. 0:07:26.840 --> 0:07:27.280 Then you know that. 0:07:27.360 --> 0:07:30.120 I think the biggest one that was part of the 0:07:30.200 --> 0:07:33.320 opening statements is what's now last look they call it. 0:07:33.640 --> 0:07:36.680 You know, there was something called first look, which was 0:07:36.760 --> 0:07:40.000 really before a real before the auction's really opened up 0:07:40.040 --> 0:07:43.760 with header bidding, and first looks kind of just the 0:07:44.400 --> 0:07:47.360 simplify It's basically if you put in if a publisher 0:07:47.440 --> 0:07:49.960 said Hey, I've got this ad unit and I'm willing 0:07:50.040 --> 0:07:53.080 to sell it to anybody, and the floor the lowest 0:07:53.160 --> 0:07:56.280 price i'll sell it for is five dollars. Then Google 0:07:56.360 --> 0:07:58.480 always had the chance to say I'll take it before 0:07:58.480 --> 0:08:00.680 it even goes into the auction. They could say they 0:08:00.760 --> 0:08:02.880 had first look, and they could just say I'll take 0:08:02.920 --> 0:08:05.800 it for five dollars and a penny basically before they 0:08:05.840 --> 0:08:09.440 even put it in the auction. And over time that 0:08:09.880 --> 0:08:14.400 transitioned into something called last look, so that when auctions 0:08:14.440 --> 0:08:19.760 started to open up because of their privileged position that 0:08:19.880 --> 0:08:23.600 Google had, they had something called last look, where after 0:08:23.840 --> 0:08:26.200 all the auction took place, they could then look at 0:08:26.280 --> 0:08:28.480 the winning bid and decide if they wanted to beat 0:08:28.520 --> 0:08:29.679 it by another penny. 0:08:30.160 --> 0:08:33.120 Oh, so they can literally just rig the dice pretty 0:08:33.200 --> 0:08:34.640 much as they want. 0:08:35.040 --> 0:08:38.360 Like it. I mean, that's the way it's I mean, 0:08:38.400 --> 0:08:39.480 that's the reading in the room. 0:08:39.559 --> 0:08:42.079 And it's interesting because you know, I think one of 0:08:42.080 --> 0:08:45.559 the biggest questions always going into this trial was, you know, 0:08:45.600 --> 0:08:47.480 it was originally gonna be a jury, now it's a 0:08:47.880 --> 0:08:50.319 this judge bring them a was you know, can you 0:08:50.440 --> 0:08:55.360 explain these live high speed trading auctions of ad tech, 0:08:55.960 --> 0:08:59.319 you know, to the average American, and they're doing a 0:08:59.400 --> 0:09:01.679 really good job explained. I think the judge gets it, 0:09:01.760 --> 0:09:04.319 the people in the room get it, and you know, 0:09:04.400 --> 0:09:06.480 I think Last Look was one of the better examples 0:09:06.520 --> 0:09:10.360 where the Justice Department and their opening statement described it 0:09:10.480 --> 0:09:14.679 as kind of like a classic silent auction where every 0:09:14.720 --> 0:09:17.360 party writes down their bid on the slip of paper. 0:09:17.960 --> 0:09:21.520 It's in a sealed envelope, and you only get to 0:09:21.559 --> 0:09:22.040 bid ones. 0:09:22.320 --> 0:09:24.600 And then at the end of the auction, Google gets 0:09:24.640 --> 0:09:27.240 to peek into the envelope see what the highest bid 0:09:27.320 --> 0:09:28.880 is and say, you know, I'll pay a penny higher. 0:09:28.760 --> 0:09:31.640 For that, And so Google gets the big twice where 0:09:31.679 --> 0:09:32.880 everyone else gets to bid ones. 0:09:33.160 --> 0:09:36.000 Essentially, that's essentially what happens, right, and so they get 0:09:36.040 --> 0:09:39.679 to pick off wherever they think there's additional value because 0:09:39.760 --> 0:09:40.920 of the quality of the impression. 0:09:41.360 --> 0:09:44.240 And this is in the tool that lets you let's 0:09:44.280 --> 0:09:46.720 publish a sell adspace, right, Yeah. 0:09:46.600 --> 0:09:48.200 It's basically what it's called an SSP. 0:09:48.360 --> 0:09:52.080 It's the supply side platform that takes their inventory puts 0:09:52.080 --> 0:09:52.760 it out for auctions. 0:10:02.200 --> 0:10:04.720 So as as you're finding from my litany of very 0:10:04.760 --> 0:10:07.640 simple questions, this stuff is pretty complex. Is the judge 0:10:07.679 --> 0:10:08.079 getting it? 0:10:08.920 --> 0:10:09.640 I think she is. 0:10:10.040 --> 0:10:10.240 Yeah. 0:10:10.520 --> 0:10:13.360 I mean they're you know, they're they're coming up with 0:10:13.760 --> 0:10:16.400 I think, simple ways to explain it. She's she seems 0:10:16.600 --> 0:10:19.679 sharp as attack and she's you know, fair as can be. 0:10:19.800 --> 0:10:22.520 I mean, she runs a court room like I've never seen. 0:10:23.480 --> 0:10:26.240 But the technical aspects of it, I think they're going 0:10:26.280 --> 0:10:29.480 as deep as they really need to. And you know, 0:10:29.559 --> 0:10:34.040 they had an expert witness in Carnegie Mellon computer science 0:10:34.120 --> 0:10:37.920 professor doctor Robbie and he did a really good job 0:10:38.040 --> 0:10:41.880 of of with some visuals of explaining the kind of 0:10:41.960 --> 0:10:46.520 the three or four kind of most important ways in 0:10:46.640 --> 0:10:50.600 which they were quote unquote rigging or allegedly rigging the auctions. 0:10:50.640 --> 0:10:52.439 And he kind of walked through each of those and 0:10:52.559 --> 0:10:54.199 it was it was easy to follow. 0:10:54.720 --> 0:10:57.480 And what was his testimony Exactly what did he get into. 0:10:57.880 --> 0:11:00.600 Well, he walked through that that last look and why 0:11:00.720 --> 0:11:04.120 that was so important as an example that we just 0:11:04.200 --> 0:11:08.760 talked about. He talked through something called dynamic revenue sharing, 0:11:09.480 --> 0:11:14.400 which is a pretty big advantage that Google just gave 0:11:14.480 --> 0:11:19.559 itself in addicts also where you know, they the way 0:11:19.679 --> 0:11:23.439 he testified was that Google recognized and there's there's tons 0:11:23.440 --> 0:11:25.760 of emails that they put up that back this up. 0:11:25.920 --> 0:11:28.800 So it's not or maybe past the stage of having 0:11:28.840 --> 0:11:31.000 to say their allegations because there was evidence going up 0:11:31.000 --> 0:11:35.679 on screens. But what they did was, you know, Google 0:11:35.720 --> 0:11:39.439 takes twenty percent, as I mentioned, of the transactions that 0:11:39.520 --> 0:11:42.240 go through addicts, and so the other eighty percent goes 0:11:42.280 --> 0:11:46.000 to the publisher. So in simple terms, if it's a dollar, 0:11:46.600 --> 0:11:48.960 if it's a dollar transaction, Google's going to take twenty cents, 0:11:49.000 --> 0:11:50.000 the Publisher's. 0:11:49.520 --> 0:11:50.440 Going to take eighty cents. 0:11:51.080 --> 0:11:52.920 And what they did was they said, you know what, 0:11:53.120 --> 0:11:56.240 if we've got this last look and we know that 0:11:56.360 --> 0:11:59.160 somebody else is going to win this ad at eighty 0:11:59.280 --> 0:12:02.840 one cents, because we're only going to get eighty cents 0:12:02.840 --> 0:12:05.600 across to the publisher, why don't we take our revenue 0:12:05.640 --> 0:12:09.280 share down off twenty percent to fifteen percent and. 0:12:09.360 --> 0:12:12.200 So then we'll win out and eighty five cents will 0:12:12.200 --> 0:12:13.160 go through and will win the bid. 0:12:14.000 --> 0:12:18.240 And so, in Google's own words, in their own email, 0:12:18.480 --> 0:12:21.480 they described it as just another way to exploit the 0:12:21.520 --> 0:12:23.719 fact that they had last look. So we've got this 0:12:23.880 --> 0:12:25.960 last look, why don't we come off of our twenty 0:12:26.000 --> 0:12:29.320 percent share if it allows us to win the impression, 0:12:30.679 --> 0:12:33.559 and so that's a way to take. You know, it 0:12:33.600 --> 0:12:37.480 didn't actually drive that much more revenue through, but what 0:12:37.600 --> 0:12:40.160 it did was it gave them a lot more volume 0:12:40.200 --> 0:12:42.600 and activity. A lot more of the bids were won 0:12:42.679 --> 0:12:45.719 through their exchange rather than the other competitive exchanges that 0:12:45.760 --> 0:12:46.160 were out there. 0:12:46.200 --> 0:12:46.880 If that makes sense. 0:12:47.760 --> 0:12:51.679 It does. So you talk about them needing addicts to 0:12:52.320 --> 0:12:54.640 like forgive me in for sense to this book. The 0:12:54.800 --> 0:12:57.520 demand that they have, that's really their secret source, the 0:12:57.559 --> 0:13:00.920 demand that they can source. Why is an Why can't 0:13:00.960 --> 0:13:03.199 anyone else get that kind of demand? What is it 0:13:03.280 --> 0:13:04.079 that's stopping them? 0:13:04.679 --> 0:13:05.360 Well it starts. 0:13:05.480 --> 0:13:07.280 That's where this is interesting because it kind of starts 0:13:07.360 --> 0:13:12.000 with the search trial that they just won last month, right, 0:13:12.120 --> 0:13:15.319 and so that remember the the other case over in 0:13:15.440 --> 0:13:20.040 DC was that Google has monopoly power over search text 0:13:20.120 --> 0:13:23.720 advertising too, and so they've got this platform in which 0:13:24.120 --> 0:13:28.520 advertiser going into buy ads in which they've got monopoly power. 0:13:29.400 --> 0:13:34.560 And so trying to convince you know a lot of smaller. 0:13:34.240 --> 0:13:38.920 Business advertisers out there, small market advertisers to go through 0:13:39.000 --> 0:13:42.839 another platform is in itself difficult. There's friction there, and 0:13:42.960 --> 0:13:46.840 so everybody spends money on Google already, and so they 0:13:46.880 --> 0:13:49.720 already come in with that massive advantage, and. 0:13:49.760 --> 0:13:52.120 It's it's more expensive to use other platforms, is it 0:13:52.200 --> 0:13:53.920 more burdensome to set up with them? 0:13:54.679 --> 0:13:56.880 You know, we haven't really got into the quality of 0:13:56.960 --> 0:14:00.000 the buyside platforms. They seem, you know, to be discribed 0:14:00.200 --> 0:14:03.600 as relatively comparable. So it's more a matter of having 0:14:03.679 --> 0:14:06.760 one central, you know, interface in which you're buying. So 0:14:06.960 --> 0:14:09.160 but it's clearly, you know that money is going to 0:14:09.200 --> 0:14:10.920 be coming through from the Google site no matter what, 0:14:11.920 --> 0:14:13.839 that's going to go to Google's platforms is going to 0:14:13.880 --> 0:14:16.320 go to the wider web. And so they just walk 0:14:16.360 --> 0:14:18.880 in with a massive advantage on the demand side. And 0:14:19.200 --> 0:14:22.040 so the real, you know, the real challenge is that 0:14:22.160 --> 0:14:24.880 that or the issue is that demand should be able 0:14:24.960 --> 0:14:28.040 to go to other exchanges, not just to Googles. And 0:14:28.360 --> 0:14:30.760 that's where I think Google's trying to set up its 0:14:30.800 --> 0:14:34.640 defense is that that they shouldn't have to connect their 0:14:34.680 --> 0:14:35.880 demand to other platforms. 0:14:36.280 --> 0:14:38.840 There's no there's no issue with well, we'll get to 0:14:38.880 --> 0:14:39.880 the legal piece of it, the. 0:14:39.880 --> 0:14:43.440 Good Yeah, even though that seems a perfectly reasonable thing 0:14:43.520 --> 0:14:47.400 to say for anything like this, right connecting. So is 0:14:47.480 --> 0:14:51.000 this suggesting that all Google so do all Google properties 0:14:51.120 --> 0:14:53.760 run through at X, Like you can't buy advertising on 0:14:53.960 --> 0:14:56.200 Google Ads without going through at. 0:14:56.280 --> 0:15:02.240 X, can't buy now, So I'm sorry to Yeah, I 0:15:02.320 --> 0:15:05.840 wish I had my visuals we're talking, but you can't 0:15:06.920 --> 0:15:10.760 if the advertising demand on the buy side on Google 0:15:11.480 --> 0:15:16.120 that has to go through ad X in order to 0:15:16.240 --> 0:15:17.600 go to other publishers. 0:15:17.680 --> 0:15:20.040 And so right, yeah, I think that's the same thing 0:15:20.080 --> 0:15:20.520 you were saying. 0:15:20.640 --> 0:15:24.760 So, yes, Britty, and that demand is coming from advertisers, 0:15:24.800 --> 0:15:27.200 as in people who want to advertise on different platforms, 0:15:27.240 --> 0:15:32.920 that's right, But then it goes through ad X and 0:15:33.080 --> 0:15:36.080 then Google basically gets the monkey with at the beginning 0:15:36.120 --> 0:15:38.520 of the end of it. It's just it feels fairly, 0:15:39.680 --> 0:15:40.480 fairly crooked. 0:15:42.400 --> 0:15:44.160 That's the feeling when you're sitting in the room. It 0:15:44.320 --> 0:15:45.760 very much does. And there's a lot of, you know, 0:15:45.840 --> 0:15:48.640 emails from Google employees where you can tell they feel 0:15:48.720 --> 0:15:51.080 like this might be a little crooked, you know. 0:15:51.320 --> 0:15:55.200 So there was the thing The Verge quoted a particular 0:15:55.280 --> 0:15:58.640 witness and news corp that seemed quite interesting who said 0:15:58.680 --> 0:16:03.720 she felt like they were being held hostage by Google. 0:16:04.680 --> 0:16:07.000 Did you I did? Yeah, she was, she was really 0:16:07.040 --> 0:16:11.040 see laser. She no longer is with news courts. She's 0:16:11.160 --> 0:16:13.720 actually at Amazon now, which is interesting. 0:16:13.800 --> 0:16:17.920 But she she gave really clear evidence and testimony, and 0:16:19.160 --> 0:16:22.480 you know, she she was explaining how there was really 0:16:22.560 --> 0:16:26.200 no choice to use any platform but DFP as their 0:16:26.240 --> 0:16:30.320 ad server, and therefore with it, it comes with all 0:16:30.400 --> 0:16:34.200 these other obligations. And you know, the one thing that 0:16:34.320 --> 0:16:38.040 Google did that she seemed to really not like was 0:16:39.000 --> 0:16:41.640 there is a point that was important in time where 0:16:41.800 --> 0:16:45.960 Google ted to publishers you can no longer have floors 0:16:46.640 --> 0:16:49.520 price floors on individual exchanges. 0:16:49.680 --> 0:16:51.120 So yeah, what does that mean? 0:16:51.920 --> 0:16:55.880 Essentially, if you're a publisher, if you're a website and 0:16:56.600 --> 0:17:00.160 you're saying, I have this AD that's available, and I 0:17:00.360 --> 0:17:05.919 will allow five different exchanges to put forward their highest 0:17:05.960 --> 0:17:06.680 bid for it. 0:17:06.840 --> 0:17:09.040 And when you say AD available, you mean like space 0:17:09.160 --> 0:17:09.879 on a website too. 0:17:10.160 --> 0:17:11.680 They can add banner on their homepage. 0:17:11.760 --> 0:17:14.560 Yeah, so a banner on their homepage and they're making 0:17:14.600 --> 0:17:17.639 it available to let's say five different exchanges. One of 0:17:17.680 --> 0:17:21.080 those is ad X, but then let's say also Pobmatic 0:17:21.280 --> 0:17:25.399 and Rubicon in exchange, these various SSP's we call them. 0:17:25.480 --> 0:17:28.960 And for a while you could actually set a price 0:17:29.080 --> 0:17:32.480 floor essentially the lowest price you were willing to sell 0:17:32.600 --> 0:17:36.240 that banner on the homepage, and you could set it 0:17:36.320 --> 0:17:38.119 individually based on the exchange. 0:17:38.520 --> 0:17:40.920 So what publishers were often doing was they were putting 0:17:40.920 --> 0:17:44.040 a higher price floor for ad X, for Google, for 0:17:44.080 --> 0:17:47.200 add X for a number of reasons, you know. And 0:17:47.280 --> 0:17:50.440 some of those reasons included wanting to diversify so not 0:17:50.520 --> 0:17:53.400 all the revenue and spend was coming from Google because 0:17:53.440 --> 0:17:57.520 that could create risk as we see. They also wanted 0:17:57.560 --> 0:17:59.600 to manage the quality of the ads because sometimes the 0:17:59.640 --> 0:18:02.240 ads is a high quality coming through at X. So 0:18:02.280 --> 0:18:04.080 by having a higher price point, it kind of weeded 0:18:04.119 --> 0:18:06.399 out some of the garbage. And so there there are 0:18:06.400 --> 0:18:08.640 a number of reasons. And at this moment in time, 0:18:08.760 --> 0:18:11.240 Google said, you know what, you now need to have 0:18:11.320 --> 0:18:15.960 a universal price floor across everyone, and that basically gave 0:18:16.080 --> 0:18:19.200 ad X the same, you know, the same advantage, made 0:18:19.200 --> 0:18:21.120 sure it had the same price floor as everyone else. 0:18:21.640 --> 0:18:24.879 But how do they maintain a price floor across other platforms, 0:18:25.040 --> 0:18:27.680 Like how did they just say if you violate this, 0:18:27.840 --> 0:18:29.120 you're off of our ad platform. 0:18:29.440 --> 0:18:32.840 Well, it all it's because again DFP, the ad server 0:18:34.119 --> 0:18:38.000 is also Google, so it's the source of truth. Yeah. 0:18:38.160 --> 0:18:41.200 So they so they own the place where ads negotiate, 0:18:41.480 --> 0:18:43.520 the place where ads come from, and then the server 0:18:43.640 --> 0:18:46.440 that puts the ads on places bing go. That's really 0:18:46.920 --> 0:18:47.440 that's good. 0:18:48.200 --> 0:18:50.520 That seems that seems like if you can, if you 0:18:50.520 --> 0:18:51.119 can keep it right. 0:18:51.320 --> 0:19:06.200 Yeah, but that might be a problem for them. So 0:19:06.760 --> 0:19:10.800 whether on the other really cool like publisher witnesses interesting people. 0:19:11.359 --> 0:19:13.840 So on the publisher side for listeners, we're just saying 0:19:13.880 --> 0:19:16.520 that's the people putting ads up. Sorry, they're the ones 0:19:16.560 --> 0:19:17.840 providing at inventory. 0:19:18.640 --> 0:19:22.159 Yeah, you know, we heard from Gannette was awesome. He 0:19:22.240 --> 0:19:25.679 was actually the first witness Gannet, the big newspaper company. 0:19:26.600 --> 0:19:30.720 They're head of their ad operations group. That was the 0:19:30.800 --> 0:19:34.760 very first witness on Monday. You know, he really set 0:19:34.880 --> 0:19:39.200 up the some of the basic foundation of the case. So, 0:19:39.480 --> 0:19:41.680 you know, I think it was enough. 0:19:41.560 --> 0:19:42.760 Really from the publisher side. 0:19:42.800 --> 0:19:44.760 Now we're actually deeper in the weeds of the conduct 0:19:44.840 --> 0:19:46.960 issues and some of these like you know, the revenue 0:19:46.960 --> 0:19:48.600 sharing were going through and some of these other games 0:19:48.640 --> 0:19:52.200 that they played. You know, I think the most actually 0:19:52.200 --> 0:19:54.600 the most interesting one, if I can digress for a second, 0:19:55.240 --> 0:19:58.879 the revenue the dynamic revenue sharing where they would come 0:19:59.000 --> 0:20:02.879 off the twenty percent and drop down. They actually came 0:20:02.960 --> 0:20:07.240 out with dynamic revenue Sharing two, where they seemed to 0:20:07.320 --> 0:20:10.000 realize that, you know, it was hurting their margins coming 0:20:10.040 --> 0:20:13.119 down off twenty percent in order to win the transaction, 0:20:13.760 --> 0:20:16.040 so they decided they would also go higher than twenty 0:20:16.080 --> 0:20:20.080 percent when they had a high enough bid already, and 0:20:20.200 --> 0:20:23.200 that would allow them to recoup that margin. And so 0:20:23.480 --> 0:20:26.639 they essentially described it as a bank in which they 0:20:26.720 --> 0:20:29.440 could as the expert would have said, he described it 0:20:29.480 --> 0:20:32.760 as imposing a debt on the publishers, where basically Google 0:20:32.800 --> 0:20:35.040 would say, you know what, We're going to go offer 0:20:35.240 --> 0:20:38.119 take less than twenty percent revenue share in order to 0:20:38.160 --> 0:20:40.000 win and add but then we're going to go ahead 0:20:40.000 --> 0:20:42.600 and hold a little debt for you publisher, and we're 0:20:42.600 --> 0:20:44.520 going to take that money back later on and pay 0:20:44.520 --> 0:20:45.200 ourselves back. 0:20:45.720 --> 0:20:48.520 Wait, so when they came up, so when they reduced 0:20:48.560 --> 0:20:52.640 their car to win a bit, they would then take 0:20:52.800 --> 0:20:55.280 the remainder of the car that they had lost and 0:20:55.400 --> 0:20:57.440 then charge the people they were meant to give money. 0:20:57.760 --> 0:20:59.200 So the place where the app was going. 0:20:59.520 --> 0:21:02.439 Yes later but later on, so you know, maybe they 0:21:03.040 --> 0:21:06.480 one ad goes through at a fifteen percent revenue share, 0:21:06.640 --> 0:21:08.760 that they came down off twenty percent in order to 0:21:08.840 --> 0:21:12.280 win that transaction, and then maybe the next time an 0:21:12.280 --> 0:21:14.320 AD went through on that site they would. 0:21:14.080 --> 0:21:16.280