On Wednesday, a lawyer for the United States Department of Justice questioned a Google official over the methods the search and advertising giant employed to allegedly drive up internet advertising pricing unfairly.
At a once-in-a-generation antitrust trial in Washington, where the United States has accused Google of abusing its dominance of search and some advertising, Google Vice President of Product Management Adam Juda testified that the company uses a formula, which includes the quality of an ad, to decide who wins auctions used to place advertising on websites. The United States has accused Google of abusing its search dominance and some advertising.
The testimony of Juda started on Tuesday and went through Wednesday.
The United States Department of Justice has accused Google of using these formulae to manipulate online auctions, a multibillion-dollar market that Google mostly controls, to favor the company’s bottom line.
The attorney for the Justice Department, David Dahlquist, asked Juda whether he agreed with a paper that Google had written for the European Union. This document said that the firm may “directly affect pricing through tunings of our auction mechanisms.” Juda was asked if he agreed with this statement. Juda stated that he denied doing so.
When asked whether “tuning” can affect pricing, Juda said “they can.” According to Juda, one of the things that may be “tuned” is a crude formula that determines the long-term value, or LTV, of advertising by taking into account the amount of the bid, the possible click-through rate (i.e., the number of people who are likely to click on it), and the quality of the advertisement as well as the website that is linked with it.
Both website publishers and advertisers have leveled accusations of money theft against Google Advertising, citing a perceived lack of transparency in the company’s operations as the primary reason for their complaints.
The prior evidence, centered on the billions of dollars that Google spent to maintain its search engine the default on smartphones and other devices, has been replaced with new testimony focusing on advertising.
