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Welcome to the Monopoly Report.The Monopoly Report is dedicated to chronicling and analyzing the impact of antitrust and other regulations on the global advertising economy.
If you are new to the Monopoly Report, you can subscribe to our weekly newsletter at monopoly.marketexture.tv.
I'm Alan Shappell, and I'm excited to be taking over the reins here at Monopoly Report, and I'm of course joined by our fearless leader, Eric Pipero.Hey, Eric, how are you doing?I'm great.How are you doing, Alan? I'm doing great.My eyes are hurting.
I've spent much of the last 12 hours reading through, I don't know, 1,000 or so pages.1,000 pages.
Sounds like a job for ChatGPT.
You know, there's a thing about lawyers using ChatGPT too often.They tend to frown upon that.Yeah.Well, they frown upon lawyers too.
Why don't we tell our audience what we're talking about?What 1,000 pages?
So just last night, both Google and the Department of Justice, and I guess join with them the multiple states who are suing Google for antitrust in the Google ad tech case.
But anyway, they've just filed last night their respective post-trial proposed findings of fact and conclusions of law. You can find them from our friends at CheckMyAds.They've got a wonderful repository.They've got all that stuff.
You can find it on CourtListener or you can read the Monopoly Report newsletter tomorrow and I'll tell you all about it or you can just continue listening.
I think by the time this launches, it will be tomorrow.So it'd be right now.Check it out right now.Monopoly Report, Monopoly.So I'm sorry, we have an announcement before I get started.We forgot our housekeeping.We have a new website.
So the podcasts are now available, all of them at MonopolyReportPod.com.Easy to remember, MonopolyReportPod.com.You can subscribe, you can go to YouTube, you can do whatever you want.Very helpful.
And then the newsletter remains at Monopoly.Marketecher.TV.Thank you for allowing me my little plug.
All right, fantastic.And great job putting together that side area.I appreciate it.So what are we talking about here?I mean, is there anything new, as far as you can tell?
Or is this really just maybe the last ditch effort of both the parties to provide their best argument to the judge in front of what, three weeks or so from now, they're going to do their final oral arguments?
Yeah, so the judge required this.She told both parties they had to do this to get their final findings of fact in advance of the final closing arguments.Closing arguments are the Monday of Thanksgiving week.I will be there.
write the newsletter that week and give everyone my pithy understanding of what happened there.And that's in advance of what the judge has said she wants to do, which is to give a final judgment by the end of the year.
I think the judge specifically said on the stand that she wanted to get these final findings of fact because she will have a pretty good idea about what she's going to judge by the time the oral final arguments are made.
So the judge is coming in with a loaded gun and she's got a lot of ammo now.
Yeah, I mean, we're really at the point where everything is just sort of being polished.I mean, I think most of us have a pretty good sense of at least where this trial is going.
I think I would be shocked just by way of example if Google were to prevail here.But I don't think that's the end of it.
I think there's going to be an appeal and an appeal of the appeal and we can still easily be talking about this a couple of years from now.
But this is the last effort of the parties to be able to make their best case in front of the judge and maybe change the judge's mind on a couple of points.
Yeah, it's possible.It's also worth noting – and Alan, please keep me in check when I give legal opinions – but when you appeal a verdict like this, we don't know what the verdict is, but the verdict will come.
The appeal can't debate the facts anymore.The facts are the facts.And the appeal can talk about the process and the findings, but the facts are in stone, right?
Yeah, that's pretty much the case.But there's a whole bunch of things that I think they're still jockeying over right now, which is what's the relevant market definition.
Google is trying to say that everything that's digital that touches an ad seems to be the same market and is effectively comparing TikTok and how the Wall Street Journal approaches their ad business the same.
Some of those arguments make a little bit of sense.I think some of them border on posterous, but that's the argument that I think Google is trying to make.
I think it's interesting that the government is claiming three monopolies, DFP, AdEx, and Google Ads, and the TikTok argument is totally insane when it comes to DFP, for example.
If you think of DFP as a product, which I think most people do, and publisher ad servers as a market, which, I don't know, it seems like a market to me, they have 90% market share, you can't switch, and TikTok has no bearing whatsoever, neither does Facebook, neither does even Amazon.
It would be shocking if DFP was not considered a monopoly in the final report.But if you then think about Google Ads on the other side of things, Google Ads absolutely does compete with Meta and with TikTok and with everybody else.
And so maybe there's an argument there that's a lot more palatable.
I could be and I think that when comparing the buy side and the sell side, the buy side has a ton more elasticity.If you're Coke, I'm overstating this a little bit, but you don't really care.If you can get good results on TikTok, you're happy.
If you can also get good results on the New York Times and the Washington Post, you're also happy.If TikTok shuts down, like we talked about in a previous pod, Well, okay, then you'll just go across the street to the other venue.
But I don't think that really works from the perspective of a publisher.
No, maybe it's a little bit analogous to the financial markets where a publicly traded stock chooses a single exchange to be traded on and they're locked into that.
Whereas on the buy side, you can buy from hundreds or thousands of different paths to the exchange.Maybe it's not a perfect analogy, but it sort of resonates a little bit for me.
Yeah, I think that makes sense. Now, what's your take on just the overall arguments?
Now having maybe walked away from this for a month, now coming back to it and just looking at the comparative narrative that the DOJ is trying to spin versus what Google is trying to spin.Do you have any thoughts just regarding overall?
I don't think it's changed that much.Google's number one argument is the market definition.The market definition includes other stuff, so therefore the actual market share numbers are much lower than the government's saying.
Fine, we already talked about that.And then they have these two other arguments that are a little more legalistic, and maybe you can address them.But the two arguments that they're bringing up are the duty to deal and the two-sided market situation.
So the duty to deal, effectively, what they're saying, dumbed down, is that The customers may have wanted Google ads to interoperate with other exchanges and other ad servers, but they had no actual obligation to do so.
And in the trial, the Google witnesses put up some compelling evidence that it was expensive and time consuming to do integrations with other parties. and that it wasn't economically feasible or worthwhile to do it.So that was the duty to deal.
And the second argument is this two-sided thing where basically they're saying if it's a two-sided market like AdEx is, and one party is a monopoly but the other party benefits from that, then it's kosher.It's okay.That's not a violation.
So that's really their case, those three things.
Right.Okay.So let's talk about the duty to deal just for a minute.I mean, I think it is not illegal to refuse to deal with another company.There's some exceptions to that where you're being discriminatory in certain cases.
But generally, there's no rule that says company A has to deal with company B or company C.
But the way that Google is positioning this, it's sort of the duty to deal rule swallows everything else so that it's almost impossible for there to be a tying case if you adopt Google's definition of duty to deal.
And so that's just on its face is a little problematic.
What about the Amex two-sided market thing?
Well, again, even that only holds water if you buy into Google's definition of market in the first place.If you disagree that the whole thing is bundled as one market, then I think Google's whole argument becomes a little bit harder to make.
The DOJ and their brief goes into some detail, but basically saying that Google's making up the two-sided market idea from whole cloth and that it doesn't really exist.Anyway, so they're calling BS on Google here as far as my read.
Former guest on this long running podcast, Jason Kent, he's really worked up about the findings that Google's employees were hiding or destroying evidence.And it is mentioned in the DOJ document today as repeated mentions of
Witnesses saying things like, oh, let's take this offline or let's turn off history and then have this conversation, that sort of thing.How big a deal is that?I think it's a really big deal.
And I'm going to go in a little bit different direction because I think that it plays very, very nicely into the larger narrative that the DOJ is trying to create here.
I mean, they're basically saying, OK, Google is set up to dominate the market as witnessed by multiple emails and witness testimony.OK, great. They did so by a variety of anti-competitive techniques such as buying and parking potential competitors.
Remember we had Tarion a couple of weeks ago, tying their products and manipulation of auctions.So three, Google's actions evidence more concern for maintaining their monopoly than serving their customers.
Then four, which is I think gets to your original question here, Google hid and probably destroyed evidence used and used questionable legal tactics in order to shield their plans from discovery. So I think it's a big deal in and of itself.
On its own, it's a big deal that all that stuff happened, but I think it really plays into the narrative that there's sort of this consciousness of guilt thing taking place.
Yeah, it definitely looked bad on trial, but this is the sort of thing where you really have to be a professional to understand whether it matters or if it's just nitpicking.I have a little sympathy for Google on this one.
I'm just going to take Google aside for one second.You have an organization with 20, 50,000 employees that touch on this issue of ad tech and sensitivity.You want to have frank conversations.
But absolutely anything you write down or chat about is going to be taken out of context and made you look like you're a gangster.So what do they do?They say, what do they say?Don't say these words.Don't say monopoly.Don't say market share.
That's pretty standard advice.And then they have this chat that they use, which is, I guess, our equivalent of Slack, but they use it internally to Google.And they set the default to history off.
And they tell their employees, like, hey, if you're having an important conversation, turn history on.And lo and behold, no one does that.Like, because why would you do that?Like, I mean, oh, we're about to say something incriminating.
Let's take notes on the criminal conspiracy.No, it's just like it's an impossible burden to ask these folks to put everything in writing, knowing that their careers could be a jeopardy if they say the wrong thing.
I think that's a fair argument, but I do think you're being a little soft on it because there are certain rules that are imposed pursuant to litigation and one of them is there are certain evidence that you were supposed to hold.
Now, they failed to do that and in litigation, you really aren't allowed to say, oopsie.Well, but they didn't delete anything.
There was no, there's no evidence they went in and said, Hey, delete all your emails or chats that are in bad subjects.They just didn't collect things.
Okay.But they didn't set up.I mean, I feel like we're going to have this like ethical, uh, what's alive is a lie of omission is still a lie.And like, I don't know here.
Well, if, if the same conversations that happened in the hallway, no one would be having this argument, but they happened on a chat system that does not capture its history.
Yeah, but you know, if there's ever a company that should understand how default settings work, it's Google, isn't it?
Yeah, I sort of get that.What I found interesting, and maybe this will prove different, I haven't been through every single piece of evidence that's in the locker.I've been through a lot of it, but not every single one.
And I found that there was a distinct lack of documents that documented actual senior level decisions about what to do.
There was a lot of situations where there was a document from a product manager or an email back and forth, a whole bunch of mid-level people having this argument, like, oh, is our rate too high?Our rate's too low.What should we do about it?
What should we do about it?And then nothing would happen.And then six months later, they would actually do something about it.And there was no connecting tissue that would have, like, Sundar say, hey, you have to do this.
or even someone a lot lower in the org, Neil Mohan or someone like that.
And there was even testimony, I think Jonathan Bellick's testimony when he talked about header bidding was that he was told that he had to make header bidding, the solution to header bidding, just better than header bidding.
He couldn't make it much better.And the follow-up question wasn't asked, like, told by whom?In what document?There is no document.
There's no one when someone's emailed Jonathan, like, hey, you have to cripple your header bidding solution because we want to keep our advantage. The lack of smoking guns is itself maybe a smoking gun, in my opinion.
Yeah.Maybe that speaks to the fact that the more senior people were a little bit more wary about how the default settings worked.
Yeah.Or they didn't put anything in writing.Yeah.
Well, and also, I mean, there's so much stuff in here even still that seems to be redacted.I find myself chasing down rabbit holes of, okay, wait, why did this happen?
Oftentimes, you end up leading to some documentation on witness X who it turns out three quarters of her testimony seems to be redacted.
Yeah, I mean, don't know why.
I mean, when they – there were quite a few read-ins of testimony during the trial that were incredibly brief, where they had obviously spent hours with a product manager like Sam Cox or Aparna Papa, I think that was her name, and then their actual testimony was less than five minutes on anodyne subjects.
And I just wonder, what else did they say?Was it just repetitive, so there was no reason to read into evidence, or is there objections?I guess we don't know.
Yeah, it's hard to say.I mean, I think that the DOJ clearly was gunning for expediency over detail.Oftentimes, even if you're dealing with a judge, I mean, just getting the primary points through is enough.
Maybe had they spent twice the amount of time in court and gotten an extra 10% of detail, would that have been more helpful or less helpful to the DOJ's case?
Right.So a couple of things to talk about here, which is, first of all, the DOJ left a lot of things out of its case on purpose.
In the press, we've heard about Bernanke, and Global Bernanke, and Jedi Blue, and all these things which were headline-grabbing, and they just weren't in the case.
They just decided not to bring them as accusations, presumably because they weren't unique facets to the Monopoly case.Maybe I'll leave it to you, Alan.What do you think about that?
Is that normal, that you would leave some accusations out that were meaty?
Well, it's a great question.It might be that the separate state AG case was the better forum for that type of stuff, and they just wanted to let all of that out there.It wasn't like what they shared wasn't pretty meaty.
So there's always going to be a strategy here, hopefully anyway, and I get this sense that Cantor and the folks over at the DOJ did this for a reason.Even if we had their information, we might have gone in a slightly different direction.
That stuff was left out for a reason.My guess, they thought that the separate state case had a better bite at that particular apple.
I think the state case is going to be frothing in the mouth on some of this stuff.It might be a little more dramatic.There was also some talk in the press box about whether the cases that both sides brought were originally intended for a jury.
And as the close listeners will know, Google got rid of the jury a couple of months before the trial by paying off the entire claim of the government
plaintiffs, so that — I don't know why that necessarily led to the jury being removed, but somehow, through some mechanism, it did.And it ended up being a judge trial, which they felt would be more beneficial.
And so the implication is that both sides' presentations were kind of dumbed down to be more dramatic and jury-friendly than sort of technical.
Yeah, I think that's right.Although I also think, boy, the judge is certainly a very smart lady, but boy, that's a lot of information to encompass on a very arcane topic really quickly.
And so maybe the dumbed down version was for the best, even if you are going to a jury.
Yeah, the judge did say a couple of things that made you wonder if, like, her understanding was as deep as we thought it was.
You know, she said something like, oh, is this like if I'm putting up a paddle in an auction and then someone else gets to bid after me?Like, yeah, that is what it's like.
But that's – I would think we would have covered that on day one, not on, like, day 15 of the trial.But she has clerks who are doing the hard work for her.So I think they'll have a pretty good understanding.
I would agree. One thing I noticed, Google – it came out at least – I had noticed it before.
Maybe this was in every single filing up to this point, but the DOJ made what I thought was a big deal over a flip-flop of Google, where apparently in a different district court case, Google had made the exact same argument about market definition as it pertained to Google as the DOJ is making in this case.
So DOJ was sort of jumping up and down and saying, hey, that's a huge flip-flop.That isn't how it's supposed to work.You're not being consistent and therefore, I think it calls into question the credibility of their market definition in this case.
That's interesting.Was that the Oregon case?I think it was Oregon, although I was searching through about half an hour ago, and I wasn't able to find the specific case.I'll try to dig it up.
I don't know anything about that, to be frank.I know it came up, and there was a bit of a loud argument about it, but I don't remember the details.
Well, what made me smirk as I was reading through that this morning was, I don't know if you remember, Google had a blog post with respect to the Epic case against Google.
Google was jumping up and down saying, hey, here is a different case with the same facts. And we got found guilty and Apple did not.That's not fair.That's not fair.
And I thought for a minute that there was sort of a, you know, what's good for the goose, good for the gander or whatever argument you want to make there.But I thought that made me smile a little bit.
Indeed.The courts are not fair.That's pretty accurate.
Yeah.Who says there's no irony in the law?
So I didn't read these 1,000 pages.I literally did send them to ChatGPT.And I am just astounded.I mean, no one needs to listen to this podcast to hear good things about AI.
But, like, in a minute, it compared to 500-page documents and gave me a pretty accurate summary.I will just say a couple things that it pointed out.So I asked it to compare the pre-trial document from Google with the post-trial document from Google.
And it broke it out into five sections and gave me their analysis of what changed.
I think the most interesting thing was the antitrust law interpretation where, according to ChatGPT, in the first filing, most of it was about established antitrust principles against market gerrymandering for litigation advantage.
And in the second one, it was much more heavily on legal precedents like Trinco and Linkline related to tying.Did you see any of this, that they were kind of changing the way that they were approaching the legal side?
Yeah, I wouldn't even say it was a change.
I would say it was a slightly different point of emphasis and that sort of makes sense because if I'm Google's outside counsel and I'm thinking back to what happened a month, month and a half, two months ago and you think about, okay, well, what are the points that we probably underemphasize that we now really want to drive home to the
to the judge, and I think that Trinko would be one of them.Because again, it's not even about this decision for Google.
It's about what – can you make sure it is on the record so that when you – assuming you do lose this, when you lose this, are those grounds for repeal?Right.
Grounds for repeal.Another thing is that the DOJ's write-up seems to put a little more weight onto AdMeld than was before the case. the AdMeld acquisition and the feeling that it was somehow anti-competitive.
And this is increasingly interesting to me because in the past week I have spoken to Ben Brokens, the founder of AdMeld, as well as a couple of their biggest customers, and I've asked about this, and no one seems to find the AdMeld acquisition problematic at all in the market.
These are the people who are frothing at the mouth about things like header bidding, and They're like, yeah, sure, it's a good company, got bought, no big deal.That's really the reaction for everyone.
I'm yet to find anyone who feels like they were personally hurt by the AdMeld acquisition.I'm out there, I'm listening.Reach out to me if you got screwed over somehow, but I can't find it.
Right, but isn't that an example of – Look, Google went from a level six market power to a level seven and a half market power.Some of that difference might not necessarily be measurable or even palpable to somebody.
Heck, if you ask me how I feel about the $400 million company that I just sold, I would imagine I would say, I think it's great.I think Ben tells you.
Ben has the single bad thing to say about Google.I think you're right about the six to seven and a half analogy.Because AdMob didn't have majority market share of the emerging market for yield management SSPs.
It was a leader, but it was one of five, probably.And the acquisition didn't give Google any structural advantage it didn't have previously.And they didn't really do much with it.So it seems like it's just a bump in the road.
Yeah, that was sort of my read.I thought it was interesting that the DOJ seemed to be making it a larger point of emphasis in this one.
But they mentioned it more often in this filing than I think in the previous one, what, a month, month and a half ago.So that's certainly a larger point of emphasis.
But of the things that Google allegedly did, I personally didn't think the AdMeld thing was the biggest thing either.
No, I didn't think so at all.I think Jedi Blue is interesting because it was removed from the Texas case, and then Jason keeps insisting it's back in, but I've seen no evidence that it's actually back in.
So Jason, if you have a document saying the Jedi Blue is back into Texas, I want to see it.I don't want to hear about how you saw Sheryl Sandberg in the Dallas airport.I want facts.So anyway, so Jedi Blue got kicked out of that one.
And it also wasn't in this one.And yet it seems pretty fishy that Facebook basically abandoned header bidding and went for open bidding and paid 5% more for some guarantees of quality.
I know it's sort of moot because they're not in the display market anymore, but it definitely seems like it's a bigger deal than it's been given on the courthouse stage.
On a related note, I thought Google made a really big deal this time through about – many of the witnesses on behalf of the DOJ were competitors of Google's and that they were just – they wanted Google to turn their tools into a public utility or – it almost had like the air of like, oh, it's commie.
I love that.I love the tech company.It did come up in trial.Three different witnesses said, oh, well, it should probably be a public good of some kind.And I was like, what's going on?There's creeping socialism in the Virginia courthouse.
Well, but it's funny.And I wasn't in the courthouse, so you probably have a different color than I do.But just in reading the documents as I went through it,
It felt like it was very much based on a particular context and in the context of header bidding, you could say as a publisher, listen, we had built this cool thing.Google forced us to tear it down.
They built something that wasn't as good and they started charging us for it.What we want is the thing that we built for free that was owned by the community.
Yeah.They didn't force them to tear it down, but other than that, I agree with that characterization.They built something that was advantageous, but in a way that would benefit them, and then they took away their ability to price it in a smart way.
You could say it was illegal.You could say it was not illegal.You could say it was good.You could say it was bad.But there's no argument that it was arrogant.
And when I talk to publishers about those moments, that time period of the unified auction and all that rollout, it's like the feelings are gaslighting, arrogance, loss of trust, loss of whatever business relationship these people had.
And that's sort of irreversible. Well, it's funny you say that because this was one of my final points as I was reading through this.I deal with Google like you have for a long time.Often, there's this sort of googly way of explaining things to you.
Some of it's gaslighting.Some of it's this weird, bizarro Ted Lasso thing that a lot of them do.A lot of them do that.
Wait, wait, Ted Lasso, what Ted Lasso thing?
Well, it's super friendly, and they make the kind of jokes, and they're very likable, and yet at the end of the day, you're kind of screwed.Right.That's absolutely what happens.
But what I've noticed is that Google seems to be taking that same approach here in the court system, and I don't think that's going to work for them.No.
They are very much taking that approach.
And I find that odd because this isn't their first rodeo when it comes to the legal process.
But they literally seem to be – they seem to be taking the identical approach here as they are like at an IAB tech lab event or somewhere where they like curate the audience and make sure there's no dissenters and they set up the agenda in a way that you can only characterize things a certain way or whatever.
Anyway, you can't do that in court and it seems like that's what they're trying to do nonetheless.
Well said, the Ted Lasso thing, I'm going to use that.All right, we're out of time.This was an amazing emergency episode.It wasn't really that much of an emergency, it's just some documents.We will be back with a guest next week.
We have Don Marty from Raptive, who is also part of Mozilla, and we talked in-depth about browsers and everything about browsers, so that's exciting.Just a reminder, we have a new website, myarchitecturereportpod.com.
which was really nice and easy to find any of our episodes, so check it out.Alan, thank you very much.
Thanks so much, Eric.Safe travels.
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