The US Department of Justice has released 143 slides from the antitrust trial against Google.
Key insights include:
Slides 28 - 34: Google reportedly doesn't feel market pressure to improve advertising as it operates in a separate market where Facebook doesn't compete and Bing's share is insignificant. In Japan, advertisers divide their search budgets between Google and Y!J, reducing competition in Google’s auctions and lowering CPC.
Slide 56: Google allegedly profited from a 20% price increase on mobile via algorithm changes in 2017.
Slide 75: Discusses second-price auctions and the "failure scenarios" where not enough "value is extracted", such as when reservation prices are low or competition is weak or absent.
Slide 77: Identifies three levers to affect pricing in auctions: format pricing, squashing, and reserves.
Slides 81 - 84: Provides details and examples of the three levers. For example, the Momiji Project reportedly generated higher CPCs for top-ranked advertisers (+15%) by combining format pricing (10%) with squashing (+5%).
Slide 99: An expert plaintiff argues that the ad rank of the Runner-up can be inflated under randomized GSP, leading to higher CPCs for the Winning-Ad.
Slides 110 - 125: Shows how advertisers' loss of control due to the loosening of keyword match types and a significant decrease in query visibility leads to thicker auctions and higher prices.
Slides 126 - 143: Emphasizes that Search is a unique channel and Display, Discovery, and Social are not substitutes but complements. A case study on the Facebook boycott of Nike is provided, showing that Search ad spend remained constant while Social media spend was reallocated to Display ads.
The author, with an economics background, appreciates the analysis for providing a different perspective on the landscape they've been working in for the past decade. They acknowledge the complexity of the topic, which requires expertise in both law and economics.
