In a significant antitrust trial in Washington, a lawyer from the U.S. Justice Department questioned a Google executive on Wednesday regarding tactics the tech giant used to increase online advertising prices in a potentially unfair manner.
At the heart of the trial is the accusation that Google, which dominates online search and advertising, manipulated online auctions through formulas that favored its own profits. Google executive Adam Juda testified that the company relies on a formula, which considers ad quality, to determine the winners of advertising auctions used to place ads on websites.
During the trial, Justice Department attorney David Dahlquist asked Juda if he agreed with a document prepared by Google for the European Union. This document suggested that Google could influence pricing through adjustments to its auction mechanisms. Juda disagreed with this statement.
When pressed further on whether “tuning” could affect pricing, Juda admitted that it could. He explained that one aspect that can be adjusted is a formula that assigns a long-term value to an ad based on factors like the bid amount, potential click-through rate, and ad quality.
Dahlquist also inquired if Google had made changes to its ad sales process that led to higher costs per click for advertisers. Juda acknowledged that this had happened.
However, during questioning by Google’s lawyer, Wendy Waszmer, Juda clarified that his ad quality team did not have the unilateral authority to raise prices.
Google’s advertising practices have faced criticism from both advertisers and website publishers for a lack of transparency, with both parties alleging that Google takes too large a share of revenue.
This testimony on advertising practices is a departure from previous discussions, which focused on the substantial sums Google spent to maintain its search engine as the default option on smartphones and other devices.
