Google tried to play a “jedi mind trick” on the advertising technology world, according to newly unsealed court documents. In this case, Google wanted to influence publishers to abandon header bidding, which was growing in popularity as a way of serving ads online, bypassing Google’s ad auctions.
In 2018, Google initiated a program called “Jedi Blue,” which hinged on a deal with Facebook, to steer the social network away from joining forces with publishers in header bidding.
“Google employees discussed playing a trick — a ‘jedi mind trick’ — on the industry to nonetheless get publishers to cut off exchanges in header bidding,” according to newly unredacted court filings released Friday. “Google wanted to ‘get publishers to come up with the idea to remove exchanges ... on their own.’ Google then proceeded to cripple publishers’ ability to use header bidding in a variety of ways.”
The Southern District of New York released the unredacted court filings in the lawsuit, which came from 10 states late last year. Texas Attorney General Ken Paxton is one of the lead prosecutors alleging “collusion” among Google and Facebook, to fix ad markets in their favor. The lawsuit made a few staggering claims about how much Google sucks up in fees as the ad auction gatekeeper to millions of small websites and large publishers. Google collects “a very high tax of 22 to 42% of the ad dollars otherwise flowing to the countless online publishers and content producers such as online newspapers, cooking websites, and blogs who survive by selling advertisements on their websites and apps,” according to the lawsuit.
A Google spokesperson said the figure in the lawsuit was misleading, pointing to a blog post Google issued last year.
“We found that on average, news publishers keep over 95 percent of the digital advertising revenue they generate when they use Ad Manager to show ads on their websites,” Google said in the post.
The states in the lawsuit are trying to paint a picture of corporate duopolists that crushed the adoption of header bidding, an alternative ad tech infrastructure. It’s unclear how strong that case will be, as header bidding is still going strong in practice and Google claims it has mounting competition in internet advertising. The lawsuit alleged that Google was mostly concerned that Facebook would enter into header bidding more aggressively, and it crafted a secret deal with the social network to dissuade it.
“Just because Attorney General Paxton asserts something doesn’t make it true,” a Google spokesperson said in a statement to Ad Age. “This lawsuit is riddled with inaccuracies. In reality, our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world.
“There is vigorous competition in online advertising,” the statement added, “which has reduced ad tech fees, and expanded options for publishers and advertisers. We will strongly defend ourselves from his baseless claims in court.”
Facebook did not immediately respond to a request for comment.
The unredacted papers revealed more about the allegations against Google. The name "Jedi Blue" had been known, but details of the project were hidden in the initial filings. On Friday, the unredacted version described how Google felt threatened by header bidding, a form of auctioning internet ads that took off in the mid-2010s. In 2016, Facebook had made a public show about supporting the header bidding marketplace, and then mysteriously dropped its interest. Facebook instead went with a deal to join Google.
Google had developed an alternative to header bidding called Open Bidding, which brought many companies into its ad software with tools that mimicked some of the services publishers liked about header bidding. Google had been making the case to publishers to abandon header bidding because the code from its competitors was slowing their websites.
“Facebook Audience Network (FAN)’s involvement isn’t a secret,” Google said in a blog post earlier this year countering Paxton’s allegations. “In fact, it was well-publicized and FAN is one of over 25 partners participating in Open Bidding. … Of course we want FAN to participate because the whole goal of Open Bidding is to work with a range of ad networks and exchanges to increase demand for publishers’ ad space, which helps those publishers earn more revenue.”
Google has also said that Facebook received no special benefits in its deal to join Open Bidding. But the lawsuit claimed otherwise.
“In an internal Google memo titled ‘FAN deal discussion,’ Google memorialized that ‘FAN requires special deal terms, but it is worth it to cement our value,’” according to the lawsuit. “The parties agreed up front on when and how often Facebook would bid in auctions, and when and how often Facebook would ultimately win.”
FAN is the Facebook Audience Network, which is a third-party ad network that serves ads outside of Facebook. The lawsuit claimed that Facebook faked interest in pursuing header bidding in order to win a sweetheart arrangement with Google.
“By providing Facebook with what Google called ‘special deal terms,’ combined with pre-agreed bid and win rates, Google further manipulated publishers’ auctions,” the lawsuit alleged. “Google already manipulates publishers’ auctions by giving Google bidders information and speed advantages. In 2019, these advantages helped them win the overwhelming majority of publishers’ auctions hosted by Google: about 81 percent of Google AdMob auctions for U.S. mobile app inventory, and about 71 percent of Google ad server auctions for mobile inventory.”