September 25, 2024 • 42 mins
Ed Zitron is joined by Jason Kint, CEO of DCN and Arielle Garcia, Director of Intelligence at CheckMyAds, for the third episode of Better Offline's coverage of the Department of Justice's second antitrust case against Google, one that alleges that "through Serial Acquisitions and Anticompetitive Auction Manipulation, Google Subverted Competition in Internet Advertising Technologies."
This is the third episode of our ongoing coverage of the trial, which Jason and Arielle have been attending in-person in Washington DC. Here's a great explainer about how this all works from the Better Offline Reddit.
For more information, visit https://usvgoogleads.com/ & follow Jason at https://x.com/jason_kint
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Also media.
Speaker 2 (00:06):
Hello and welcome to Better Offline. I'm your host ed Zitron.
Once again, we are here to talk about the Department
of Justices case against Google Ads. Today, of course, I'm
(00:27):
joined by Jason Kint, the CEO of DCN. We've got
a special guest as well, Ariel Garcia, director of Intelligence
to ad Transparency nonprofit Check My Ads. Ariel, Jason, thank
you so much for joining me, Thanks for having us. Likewise,
so Aria, why don't you tell me a little bit
about the end of the Department of Justices case. Anything fun,
(00:48):
interesting or scandalous happened in the last week.
Speaker 1 (00:51):
Yeah, I will say it was definitely a markedly slower
week than it was last week. A lot of the
testimony that we heard was simply for the purpose of
getting exhibits into evidence, but there were a couple of
things that stood out. We started the week with Neil
Mohan and the big revelation.
Speaker 2 (01:10):
There who is Neil Mohan?
Speaker 1 (01:13):
Well, he is now CEO of YouTube, but he came
over with the Double Click acquisition, and so what one
of the big focus areas of his testimony was about
the ad meld Yield Manager acquisition, and we saw internal
decks where they were discussing whether or not to purchase
(01:33):
and a yield manager.
Speaker 2 (01:35):
And what does that mean as well?
Speaker 1 (01:37):
So it basically helped publishers optimize yield. Jason, you can
probably add more color to this than I can. Like, Okay,
now there is one important point. There's two kind of
component functionalities that ad meld had. One was the yield
management functionality and the other was real time bidding, right.
Speaker 2 (01:59):
And just clear, yield management is managing the amount of
money you make from your ads.
Speaker 1 (02:04):
Yeah, it is. Like I said, I'm not on the
publisher side, so I don't know that I've never worked
in one, but I can I can certainly talk Google ads.
But anyway, what Google did when it ultimately did buy
ad meld was kill the real time bidding bit. But
we'll get to that. So we see a deck where
they're debating whether a yield manager would be a good
(02:26):
investment to make, and it says in the deck that
their tech is irrelevant to Google. And then we see
that they paid I don't remember the exact number, but
I think it was like one hundred million over the valuation.
And before that, we see an internal exchange where Neil
says something to the effect of, well, we could just
(02:47):
buy it and park it somewhere. So they were upset
that yield managers were starting to gain traction. It ran
the risk of disintermediating DFP, and obviously that would cause
risk to revenue through add X, which was very, very
profitable for them.
Speaker 2 (03:04):
So just break it down in simple terms for a
simpleton talking about myself here. So by killing off this product,
this yield management company, it means that they would stop
people being able to optimize how much they make. What
are the ramifications of doing this.
Speaker 1 (03:20):
Well, remember that it came with the real time bidding
functionality as well. So what this was really about was
two things. It was to again protect their addex revenue,
but also to make sure that DFPS that double click
for publishers stays critical. And so what they did was
(03:44):
they took it in. They built in some of the
core yield management functionality into DFP. They integrated that, but
they got rid of real time bidding so that they
can keep you know, restricting and setting the rules for
the auction on their side.
Speaker 2 (04:00):
Oh, so they deliberately killed a useful product that they
owned as a means of as a means of making
the product worse so that they would make more money.
Speaker 3 (04:08):
And they didn't kill it, they parked it. And then
we had Neil try to explain that park didn't really
mean what we all thought it meant. It just right
to continue to operate it status quo for now.
Speaker 2 (04:19):
That classic word park that I use to refer to
operating something and using it. That's why it's called the
car park, and you drive on it exactly.
Speaker 1 (04:30):
It's like, so we hear something else very similar. While
we're on that topic. The other one of the other
spicy things that happened was we heard from Jonathan Bellach yesterday.
He's another longtime now ex Google employee that came over
with the Double Click acquisition, and with him they were
talking about exchange bidding, which was basically the product that
(04:52):
Google launched to kill header bidding. And we see an
email about how their goal is to make exchange bidding
slightly better than header bidding.
Speaker 2 (05:05):
So the deoder bidding is the open source at network approach.
Speaker 1 (05:09):
That's correct, so well, not add network, but like header
bidding rapper, it allows them to bid without like Google
getting first looked. It enabled a fair auction, right.
Speaker 2 (05:21):
Oh, Google will never have that then.
Speaker 1 (05:23):
So what we see is that their goal was to
roll out a exchange bidding so that it's slightly better
than header bidding, and the DOJ asks, Uh, Bellak, why
slightly better? And he explains the context as his goal
was for his team to roll out a product that
(05:44):
is as much better than header bidding as possible, but
the direction from leadership was to scale it back to
only slightly better, And the DOJ asked him why that
is is it was it because they wanted to protect
the ad X revenue and he said something to the
effect of you're gonna have to ask leadership about that.
(06:05):
So that was another interesting one, right about how they
like intentionally. Oh and by this point they also mentioned
that header bidding innovation had continued and so by this
point exchange bidding would be inferior. Right, So that was
certainly interesting and also told like a bit of a
more nuanced story about the fact that even if the
(06:28):
product organization wanted to do right by their publisher customers,
they were hamstrung by leadership.
Speaker 2 (06:34):
That's very good. I think that's what we say. It
does feel like this. I don't think there's any open
and shotcase and anything like this. But it does feel
like Google's egregiously taken the piss in a lot of this,
in a lot of these scenarios. That feels like there's
been a lot of testimony and discovery that's just them saying,
(06:54):
what if we made it so that no one else
could do this and we would make more money than
them through monopolis, Like it feels almost two on the nose.
Speaker 1 (07:03):
Yeah, no, that's fair. And then I'll save my last
one big highlight that is one that not too many
other people are talking about, so I'm making sure to
talk about it all the time. So during Brian o'kelly's
deposition tape, he used to be CEO of Upnexus, now
he is CEO of Scope three. During the end of
(07:25):
his deposition tape, he talks about how pre Bid, which
is the open source thing that we were talking about
before kind of pre bid was brought to IAB tech
Lab that typically will govern like open source standards and
stuff like that. They wanted tech Lab to take over
the governance of the pre bid standards and IAB tech
(07:51):
Lab rejected it. Why because Google vehemently objected. Obviously they
were worried about the thread at post to them, and
so that's why Prebid became its own separate nonprofit. So
we also Brian flags that Google at the time at
least was the biggest financial contributor to IAB.
Speaker 2 (08:14):
And what is IAB just for the.
Speaker 1 (08:16):
Listeners Interactive Advertising Bureau. The tech Lab is a separate entity.
To be clear, there is some overlapping governance, but I
just don't I know that there will be a barrage
of people that say they're separate. So I am acknowledging
they are separate entities, but there is overlapping governance. The
IAB Tech Lab has a lot of standards, like they
(08:38):
have the open RTV standards. IAB itself has its own
standards or frameworks that it oversees. But in terms of
like the technical standards, that's that's under the IB tech Lab.
Speaker 2 (08:49):
So the the kind of like a professional association for
the ADS industry or did you ads?
Speaker 3 (08:54):
Yeah, ads, ad tech, etcetera. I mean this one just
to jump in this one to be fair, I was
I was not in the courtroom when they read this
one in when they show this deposition, so I saw
the news report on it in at exchange, I think,
but you know this is a situation where app Nexus,
the largest independent ad tech company out there besides Google
(09:17):
at the time, you know, had this open source code
that they developed with other players to open up the
auctions and create a fair environment against Google. And the
report is and what Brian O'Kelly, the CEO, testified Undrowth
is that, yeah, that they had this and they want
to donate it to the industry. Right, So you got
(09:38):
this industry association that's supposed to be for the betterment
of the entire industry, and one company's interests weighed in
heavier than the rest of the entire industry, which is,
you know, a very clear symptom of the problem we're
talking through in all these lawsuits, right, is that one
company's interests outweigh everybody else and they just continue to
gain more and more market share. So it's very that's
(09:58):
very concerning. I didn't shed like good light on IAB either, frankly.
Speaker 2 (10:02):
So it feels like we are at this point in
the ads industry where things are. If Google is broken
up in the way they're suggesting, it's going to have
more ramifications than just for Google. It feels like there
are organizational shifts that will have to happen as a result.
That's right, those who have aligned with them at.
Speaker 3 (10:21):
Least, that's right. And I think in a moment like this,
because we are geting you this moment frankly between the
search opinion and now this trial where it seems to
be headed, sometimes it's hard to think through what this
means and the collateral damage, and people worry about the negative,
but it also creates a lot of opportunity, right, and
so it unlocks and creates oxygen for everybody. And that's
(10:43):
that's the that's the fun part.
Speaker 2 (10:45):
So have we had anything more about Jedi Blue, Jedi Blue,
the Facebook Google deal? The is a big deal or
isn't a big deal, depending on who you ask.
Speaker 3 (10:54):
I looked at Texas and Q one him next year.
Speaker 2 (10:58):
That is that where the suits are happening.
Speaker 3 (11:00):
That's where the state ag suit is, and that's where
they were able to depose so Narbashi and they were
able to depose the Facebook witness. It's come up in
a few different ways and its it continues even today
where you know where they are trying to bring Facebook
in as a competitor in this relevant market that this
(11:20):
suits all about. And you start to it's the threat
of Facebook coming into the market. But the rest of
that story is that Facebook didn't really come into the
market because they had a sweetheart deal with Google to
not come into the market, right, And so we're not
telling the rest of the story right now, And I
think it's because the US Department maybe doesn't need to
tell the whole story. They already have enough. But but
(11:41):
I don't know if you have a different read aerial.
Speaker 1 (11:43):
No, I think that's right. I mean, you're exactly right
that it came up like once, But I also agree
that's part of the contortion that they're doing. Then the
other part of the contortion is still like the market
definition contortion. Like just just today, at the very end,
and they were they were going through we started to
(12:03):
hear from a Microsoft employee Beneezer, I'm bla. I think
it was is it Ben Jon? That's it was Ben Jon,
And they were talking about how Xander had helped Microsoft
gain a foothold in ad tech. But if you actually
read the document's Google was pointing us to, it was
(12:26):
talking about how Xander invested in video. So we're still ignoring,
we're still ignoring the display market. And they're like systematic
control of it. They're just kind of pointing to all
of the other areas that that they that they haven't
yet taken completely over just yet.
Speaker 2 (12:54):
Well that kind of leads us to the next part.
So it sounds like that we're recording Friday, September twentye
My iPhone has still not arrived. So Google is now
on the stand. So walk me through it, jas, wonn't
you stont sure?
Speaker 3 (13:06):
So they bring up their first witness, who we don't
know a lot about because he seems to have disappeared
off the internet, but he's been there for nearly two
decades and he's one of the few people that didn't
leave when the lawsuit was filed. And you know, most
of the Google led defense, the Google attorneys were focused on,
(13:27):
I think two things. One was having him draw out
on a visual the entire ad tech supply chain and
all of Google's components of it, which you know, at
first seemed to seem like a good strategy to kind
of confuse the room and the judge, but I think
at the end of the day it was more annoying,
(13:48):
and it actually it just showed that they were all
over the entire marketplace, right and so it was just
a lot of smoking mirrors. And then the other piece
was to try to bring in this element of all
these different products serve other types of advertising, be it video,
be it app advertising, be it native advertising in stream,
(14:14):
and so all these different things that are not actually
part of this case, to try to make advertising a
larger market than it really is, to make Google look
less of a major player. Right, so if you can
actually bring in Facebook and TikTok, or you can bring
in Netflix advertising for video, then suddenly Google's not such
a big player, right. But it just didn't It didn't work.
(14:37):
And when the Justice Department followed up, they actually just
pulled up an email from this witness where he actually
went through and talked about their business in those exact ways,
and it really negated everything he had testified. And and
you know, there are a couple kind of elements of
the judge also seeming to get a little bit annoyed
(14:58):
and kind of ready to move on.
Speaker 2 (14:59):
So but oh yeah, yeah, it also doesn't seem like
their defense is any good. It's really it's just very
weird because the Search trial, they were all piss and vinegar,
They were like ready to rumble. This one, they're coming
in They're like, well, look this is what we got.
Our first witness, who you will see has emailed literally
(15:20):
what we're going to claim. He isn't saying. It's just weird,
like they just seem almost discombobulated.
Speaker 3 (15:26):
Yeah, it felt this is their first witness, right, so
they needed to start strong. It did not. It was
not It wasn't strong. And then I mean towards the end,
just to kind of give the highlights, the two things
happened one and this is when Google's attorney was up,
but she wanted to bring up some more recent things,
(15:47):
right like the trade desk one of the companies they
compete with their earnings from last month. She wanted to
bring up something from the earnings last month, which is,
you know, a year after Discovery had closed. Like this,
it's not you know, it's like a very clear objection
for the justice.
Speaker 2 (16:02):
And that's yeah, that's like something you kind of just
kind of.
Speaker 3 (16:05):
Keeping like exhibit. It's non exhibit. It's never been you know,
asked about, it wasn't part of the deposition. It's literally
from a month ago. And they wanted to bring up
a deal that they've done with Twitter from the last
few months, right, And so the judge was like, you
know this stuff is not you know, it's too early.
She said something like, plus it's tainted, like once all
(16:25):
the lawsuits started being filed, like all this stuff is tainted,
you're giving me And so that was interesting. And then
she said, and you're also talking about this entire ad
tech ecosystem and that feels more like something for remedies
rather than liability. So she was saying, like, let's talk
about this when we start to break you up, or.
Speaker 2 (16:44):
We won't come back to this.
Speaker 3 (16:45):
We'll come back to this when we So everybody in
the court kind of looked at each other and made
their notes. But I know at the same time, you know,
I don't know if that's definitely a leading in care
where she's going, but it got our attention.
Speaker 2 (16:58):
So have you have you seen anything solid from Google? Like,
have they had any wins so far? No?
Speaker 1 (17:09):
Like, it sounds like it sounds like I am saying
that because I want to believe it and not because no.
Speaker 2 (17:16):
No, I truly don't think you like that. I wouldn't
bring anyone on who is just like we. I may
want them to lose, but I want them to lose properly.
Speaker 1 (17:23):
Yeah, no, since sincerely they do not have a strong argument.
The fact that their their first witness landed with the
judge as though they were trying to basically say, well,
wouldn't it be like super complicated to blow us up
if that's your best argument, like what you know? And
then the fact that that that again first witness, and
(17:47):
it felt a little bit like they were resorting to
tricks and bringing in documents that weren't part of discovery
and that that haven't been asked about. It's not, it
just wasn't. It was not a strong way to start.
They also their their ad Tech spaghetti football situation. The
d o J went up there and they're like, okay, can.
Speaker 2 (18:08):
You explain what that is?
Speaker 3 (18:09):
Okay, so it was that was the judge's description. So cool.
Speaker 1 (18:14):
So they bring up a gray oval on on the screen,
like a ball shaped oval, and then they ask him
to start mapping out the ecosystem and he puts they
put ad Tech ecosystem at the top. They put like
buy side on the right, uh, cell side on the left,
(18:36):
and then he starts populating it with with Google products first,
and it's all Google products. So it's like okay, like,
let's start with search and O and O and then
like like they golled ad sense for content, ad sense
for search. They go in order and they explain the
history of why they're absolutely everywhere, and then like there's
(18:57):
so now by this point and they met they draw
lines connecting everything. So at this point it's a mangled
mess of Google logos and unnamed alleged competitors Like so
it was, Yeah, it was like a big bowl of
ad tech spaghetti where Google is the is the meat
balls absolutely everywhere and some competitor flex are in there
(19:20):
a seasoning. It was, it was, And then the DOJ
gets up and they're like, first of all, we need
to preserve this because we're going to come back to it.
So they preserve that.
Speaker 3 (19:29):
Thank you.
Speaker 2 (19:30):
The way the.
Speaker 1 (19:31):
Gets up and they're like, okay, so if if if
I am a publisher, if I'm Wall Street Journal and
i want to sell ad inventory on my website and
not and I'm not on my app, right, will search
help me do that? We'll ad center search help me
do that. And they go down the list one by one,
removing the things that do not help them monetize display
(19:53):
ad space on their website and we get to basically
exactly where the OJ's complaint started, with the exception of
because he was on the cell side, they didn't touch
the DSP like they left DV three or or they
got exhausted with them with this, but but we got
to exactly why, Like to me, it actually would this
(20:16):
was the best way to explain to the judge why
their complaint outline the markets that it did. So in
my view it kind of completely horribly backfires published anywhere.
Speaker 4 (20:27):
The spaghetti will yet the monstrative football I should say
food was a was a theme today because even with
the first witness this morning, who was the expert the
last expert for the DJEE.
Speaker 3 (20:43):
Yeah, and Google was really trying to confuse the judge
and confuse him and he was really sharp and did
not fall for a lot of things that they tried
to get to bite on. But well, bad pun. Sorry,
but but Google's attorney was bringing up trying to bring
up product differentiation, I think, and I think was at
the time was trying to explain why they charged twenty
(21:05):
percent for their att exchange for the last decade while
everyone else charges a lower rate and why they could
justify this higher price and it wasn't just because of
monopoly maintenance, and so he was talking about differentiating higher
value from lower value. I think so he brought up
like he was. Well, first he brought up I think
chips and gasoline at gas stations, but then he brought
(21:27):
up the Whopper versus the Big Mac, and then he
brought up coke ver Stepsi and the judge at some
point interrupted and said, you must be really hungry this morning, so.
Speaker 2 (21:36):
You don't need the judge saying stuff like that.
Speaker 3 (21:39):
It's not it was. I think she was amused. She
was trying to bring fun to ad tech after ten
days of watching Google get tortured. So he also did.
Speaker 1 (21:48):
Not Chiquita bananas versus I'm like, nice, Well, at least
today instead of comparing apples to oranges, they're going to
do bananas to bananas. So it's progressed Jesus.
Speaker 2 (22:01):
So what is Google's argument? What is that actual?
Speaker 3 (22:05):
They just lost on market definition, They've lost on you know,
they lost on confusing the judge. I think I think
they're down to the maybe the two sets. It's this
MX case of two side and market versus if it's
one market, the whole thing versus individual markets. But I
don't everybody talk to doesn't think they have a prayer
there can you woke me through it?
Speaker 2 (22:24):
Despite its flimsiness.
Speaker 3 (22:28):
Well, one, I'm not an expert on the MX Supreme
Court case. But if you think about a credit card
transaction where on both sides it happens all at once,
then there is a case that went Spring Court. I
think it was Ohio versus I think it's OOMX. I'm
(22:48):
now outside of my boundary, but this idea that it's
a single market and both parties are transacting together at
the same moment versus this is a market. There's clearly
a byside, clearly a cult side, there's different actors on
both sides, and there are companies that you know, a
couple of companies that participate in multiple places just they
(23:10):
can't really compete. So it's it's very different than a
single credit card transaction.
Speaker 2 (23:14):
If it makes also, no, I'm pretty stupid, but something
obvious here seems to be that doesn't google bit at
the beginning and the end of the auction. It's right,
then that really isn't one thing happening in an instant, that's.
Speaker 3 (23:28):
Several things, multiplaces where it comes together then into a yeah, yeah,
there's and there's a bunch of different things, right. There's price,
there's prices that you know when you buy from MX
it's a single transaction. You don't have an auction. There's
there's lots of different things here that I think just
fall apart.
Speaker 1 (23:41):
So and they also try and make it sound like
it like in order like inherently in order to serve
one side, you have to also serve the other side.
That is simply not the case. Like, yes, there are
a few companies that have have or had before they
got driven out of the market, a DSP and SSP
(24:01):
and an ad server, right, but there are also standalone
DSPs there standalone ad servers, a handful of them left, right,
they're standalone exchanges. So it kind of falls apart in
that way as well. But I agree that that is
the only art I think. Unfortunately for them, they've put
(24:21):
all of their eggs in that basket. The other arguments
that they're making about pro competitive rationales are just very flimsy.
I actually, I mean it's so I made buzzword bingo
this week. I made Bingo cards and I passed them
out to the press box but it's every day we hear.
(24:43):
They're trying to convince the court that the fees for
their products and their growth is justified by the better
quality of their products. So they talk a big game
about inventory quality and inventory curation via add acts that
they vet. They vet the ad advertisers that are allowed
to advertise there, They that the publishers that are allowed
(25:05):
to monetize, and its like it just has in reality.
They talk about.
Speaker 2 (25:13):
Real good if you don't use the Internet.
Speaker 1 (25:16):
They talk about spam, malware, ad fraud, brand safety. So
they're trying to hold out their product as like the
pinnacle of these things. The interesting thing is from the
economists perspective quality is the way that they describe that
Robin Lee described quality is for publishers that would be
(25:36):
yield revenue money like that, that would be quality, and
for advertisers it would be ROI. So it's a it's
a lot of like chickens talking at ducks and using
words to describe different different things. The other thing I
would say that they're doing is they jump from perspective
(25:57):
to perspective depending on when it's convenient, right, So if
something is harming publishers, they'll talk about how it benefited advertisers,
But the question here is about is about the impact
of publishers. They do that all day, right, So that's
the other kind of little bit of a game that
they're playing. They're trying to show that where something was
(26:17):
bad for publishers, it was good for someone else. And
I think that the DOJ has done a good job
of also deconstructing that through largely through their expert witness testimonies.
Speaker 3 (26:31):
Yeah. The one other thing I add on the pro
competition because I felt like I got a taste of
it at the end of today, is and there's the Google.
The first witness. They were talking about the mission of
Google to fund the information of the world and where
that probably will go. And I saw this with a
search trial and I saw the app store trial they
(26:51):
Googled member. They lost both of those, but they tried
to make an argument that all of this conduct and
all this wealth that we're creating through through this Android
operating system and through this ad marketplace that we create,
actually helps fund this entire ecosystem. Right, So if you
can argue that, you know, all the way that they're
(27:12):
running their conduct to create a bigger ad market actually
ends up driving more revenue through to publishers. Then that's
they would argue that that's pro competitive even though they're
taking more and more of the money over time, and
and they're the one that's worth you.
Speaker 2 (27:27):
Know, to again through the debt thing that we talked
about last time A published it dat. Yeah, that kind
of very severely undermines their argument. Jason, you were at
(27:50):
the such trial. You said, Yes, how has Google felt
different between them? Is it the same attorneys? Is different attorneys?
Is there? Their argument sounds much weaker at the very.
Speaker 3 (28:01):
Least totally different set of attorneys. And I would say
that this case is more complicated, so there's a bigger
opportunity to try to confuse things. Where the search case
really came down to, you know, would the judge understand
(28:23):
and when be able to prove the network effects and
the importance of scale with data and then you know,
is buying out the exclusive search slot is that truly
exclusive or is that just a preference, et cetera. So
like there's this definition of exclusively conduct anyway, so that
one was more I think a matter if you had
(28:43):
to play it out and you got to see some
of the bad conduct. But it was ultimately going to
be based on some legal analysis where this one. You know,
the actual storytelling is really really important on both sides.
And you know, to be fair, we're only a half
a day into Google's defense, but it looks like the
the just departments got a lot better material.
Speaker 1 (29:05):
So there there is one thing I was reminded of
as you were talking that I'm actually curious to get
your take on while we're here. I think if there
were one argument that seems to be landing somewhat with
the judge, it is this idea that in order to
they're being asked to provide access to their customers, or
(29:28):
they're being they're being asked to allow things that would
require them to build new functionality for their tools. I
don't understand how that would land, even even even if
we buy that they would have to build these things
like how many millions do they make in a minute.
(29:48):
So I don't I don't really understand, but I just
I say that because I know. I think today the
judge did ask the expert witness, or she allowed a
line of questioning to continue that seemed to indicate that
this is an area that she is thinking about. So
I was curious about your take.
Speaker 3 (30:07):
I mean, at risk of ed asked me to explain
another Supreme Court decision. I think that that's trying to
get at the other defense that Google try to lay
out there walking in, which is this Trinco case that
basically it's a refusal to deal, that a duty to deal,
and does does a company have to actually enable its
(30:31):
rivals or provide APIs or allow its rivals to use
its products? But that's not really central to the case,
and it's really a matter of they tied their markets
together and force the customer bases to use them and
so but I think that's the line of defense they're trying.
Speaker 2 (30:48):
To be also being discovery throughout this case, where people
just talk about addicts sucking, there's that being a shitty
product that sucks.
Speaker 3 (30:57):
It's cost twice as much and it's not as good.
Because yeah, I mean, that's it's a definition of monopoly.
Speaker 2 (31:02):
Right, Yeah, it's it really feels like we're watching an
empire crumble. It's so strange because you you look at
these companies for years, it's these kind of immovable beasts,
these titans that will never be broken. But when they're
in front of the Department of Justice, Like I don't know, man,
Like it's actually good we do this, like look at
(31:23):
my look at my annoying drawing I did, Like what
do you think? Like it's just strange, like how it
was always this flimsy, really interesting to watch them have
to draw it out in that spaghetti football on a
screen and not be able to use any other fancy
video and storytelling beyond you know, the attorney at the
electron and a single visual on the wall, and you know,
(31:47):
everybody in the courtroom is watching Google pass post it
notes back and forth from its attorneys to it's cobbs
people to run out the door and try to tell
their story outside the courtroom because there's no TVs or
you know, audio ittever one. That was one thing that
you tweeted out that I'd love to talk about, though,
some of the pre briefs that Google had been doing
around Google Ads. I would love to talk about that,
(32:09):
primarily fiend of the show Casey Newton, who had the
Google's Google's lawyer's hand up his asshole, not literally, but
he was doing ventral Chris bullshit. So there was a
story towards the end of October twenty twenty. I believe
where Casey Newton on Platformer I apologized was suggesting anyone's
hands with anywhere near anyone's unmentionables there It's not true. However,
(32:33):
Casey clearly he and as part of the discovery, which
I will link in the episode notes, Jason, you posted this.
It's they briefed a bunch of journalists, including Casey Newton,
and then Casey Newton put out this piece which is like, yeah,
here's why I think the Google the Google's argument against
the oj Ovisa it's actually good. But also, yes, I
(32:57):
went and chased that bad boy down. Tell me the
little bit about these briefs because so I.
Speaker 3 (33:02):
Didn't want to call any individual because that's my job.
They're they're yeah, so you know what we saw. What
we saw was when the the Justice Department filed its
search complaints again, which is the one they just won
in August. So I, like, I tried to remind everybody
that when I when I shared that thread is this
is a complaint that was filed and then they lost.
(33:24):
People lost this right, It's a winning complaint by just department.
And what we saw was google systematic reaction to when
that complaint was filed, and all the people that they breathed,
the friends of theirs that went on air on television
to defend them, the editorial boards that they pitched, that
wrote pieces, and most of those pieces were all here's
(33:46):
why the just Department has filed a lousy case. Here's
why Google's going to win. Here's why, you know, people
don't understand how important Google is to our world. And
it turns out all those people were wrong. And you know,
and when you're writing a piece like that with the
high take the day the complaints filed, and I guarantee
most of them never read the complaint and never saw
the you know, the discovery that then came afterward. Yeah,
(34:10):
you're bound to be wrong if you're just listening to Google.
And so yeah, yeah, it's the spin machine.
Speaker 2 (34:17):
And I will just not not put any words in
anyone's mouth other than my own case. You in October twentieth,
twenty twenty. This piece is quite long. I'd say it's
about fifteen hundred and two thousand words, and it talks
about where the where the DOJ's case is weak for
quite some time, but then at the end says he
spoke with a spokesperson but it is word for word
basically what they wanted him to say. It's just shameless.
(34:39):
It's such shameful shit. Not talking specifically about Casey anymore
so that you guys can say something. It just sucks
because look, this case is, as we are finding over
these episodes, deep and weird to pull apart, and the
same as with search as well. And there's nothing wrong
with showing both sides of it. But at the same time,
(34:59):
I feel like being briefed by Google's lawyer is not
actually showing both sides.
Speaker 1 (35:04):
That's right, I mean, that's why, that's why I'm so
happy to be here throughout, even though it's obviously massively
disruptive to my regularly scheduled life. But that's but that's
exactly why it's so important. Google has so many resources
at their disposal. They have such a well oiled spin machine,
(35:26):
and it's very difficult to cut through the noise to
give perspective on actual reality. Right, So, like, yes, I
absolutely have my opinions, but it's been equally as important
with this trial to give people resources to develop their
own conclusions and to do their own analysis. So, like
(35:47):
we we've been pulling the exhibits into a way that's
more organized to just try and empower people to.
Speaker 2 (35:55):
Usv Google ads dot com. We've been hyping it in
every episode is bad and work, but.
Speaker 1 (36:00):
Like, yes, so I absolutely love weaving in my commentary
into my updates, right. But the reality is a lot
of the resources on that website are just to that
there are resources so that others have things to look
at that aren't coming just from Google's comms team, you know.
Speaker 2 (36:17):
And I think the problem with Casey's peace that I
am going to bang on him a little bit because
he deserves it, is the I actually don't mind even
if someone agreed with Google, if someone was just like
I actually think this case is weak. Like Nili Pateau,
who have my problems with he said it was a vacation.
I don't know if I agree, but that came off
as nil given an opinion, which is fine, yeah, good
(36:39):
pr whatever, but still his opinion. What Casey did here
was presented as if this was some sort of objective analysis,
and I think that what frustrates me about a lot
of this is you also, I don't believe objective analysis
really exists. I think everything's subjective. But also if you are.
If you're going to talk to Google's law talk to
(37:00):
the Department of Justice lawyer if they'll even talk to you,
and if they won't, don't talk to Google's lawyer. Yeah,
because you are being influenced and Google has so much money.
It's not like you are helping a pop star. It's
not like you're helping your favorite author. You're helping a
multi trillion dollar juggernaut that controls chunks of the world's
economy and knowledge like lorn to their reputation. It's it's
(37:24):
just it's frustrating.
Speaker 3 (37:26):
The also, the thing we saw them celebrate at the
top of their summary, which is definitely a peeve of mine.
Everybody on Twitter knows, and I feel like I've made
a little bit of a dent. There is Google and
Facebook does this too. Puts a blog post up that's
labeled often as like news, and then they put down
basically a press release, and their whole goal is to
(37:49):
get people to share that, right, and so reporters, as
soon as they post, will then share that blog post.
And Google noted that half of the stories out there
had links to their blog post, right, which is basically
just doing their press for them and so yeah, yeah,
I mean, but to be fair and flip this around
in the positive, and it's where we kind of talked
(38:10):
at the very end last episode, ED, is that because
I reflected on this today, I'm sitting there in the
courtroom and I'm looking and I've got two full rows
in front of me of Google Comms people, two full rows.
But over on the left there were also three rows
of press, which we did not have in a search case.
They're in the room, Bloomberg, New York Times, you know, adles,
(38:32):
et cetera. They're all sitting there and they're hearing the
exact same thing because they have to be in the room,
which is kind of interesting. You know, they can't be
off walking the halls. They have to be in the room.
They're gonna miss it. And then RL's back in the
corner too, just nailing everything down and like so it
does feel like we've got actual eyes and ears in
the room and getting the facts out there in a
better way than the search case.
Speaker 2 (38:52):
And it also feels like the ad pers. I feel
like the digital ad press has been like often honestly
a few years where kind of worried they were going away,
they've come back quite aggressively here, and I don't think anything.
I don't think it's anything. If it's personal, it's just
because Google's been fucking around, they're finally finding out. I
don't think it's any particular agenda. But also I do
(39:15):
challenge you listeners if you think any of this is
reporters coming in with an agenda, look at the other side,
Look at what the tech industry has done using the media,
and look at this. We should be proud as members
of the media, of the ad tech press and how
they have gone about this, and how Arielle and Jason
are ruining their weeks going to this courtroom. But it's
(39:37):
great because this is an empire. In my opinion, this
is his opinion that needs to fall that it needs
to be fair. Why do you and I are normal
people have to compete like regular people, and these rich
bastards get to do more. It's just frustrating. I like
seeing them burn. I'm completely subjected by the way. I
(39:58):
do not pretend otherwise.
Speaker 3 (40:01):
All good, All good? It so yeah, so Google, we'll
have probably about a week left of defending itself and
then they'll be back to you know, maybe some rebuttals
and stuff, but then it'll be to the judges. So
about week left, I think yeah, I think by next Friday.
Speaker 2 (40:14):
Hell yeah, well I think I think we can call
it there. Jason, where can people find you?
Speaker 3 (40:20):
Jasonderscore Kent k I N T or you can always
check out Digital Content next dot org, who I work for,
and all of our resources and our accounts there too,
an Ariel.
Speaker 1 (40:29):
Ariel as Garcia or as dot org or USV googleads
dot com.
Speaker 2 (40:35):
I'm I'm everywhere, but also genuinely USV Google Ads is
so good. It is one of the best, the best
things out there. And you can read all of those
wonderful emails where they're just like, yeah, we love doing monopolies.
Be a little bit dramatic there, but thank you so
much everyone for listening. I'm of course ed Zitchron and yeah,
we'll have probably another at least one more episode on
(40:58):
this and then we can wrap it up. Thank you
so much, thanks for having us by, Thank you for
listening to Better Offline. The editor and composer of the
Better Offline theme song is Matasowski. You can check out
more of his music and audio projects at Matasowski dot com.
(41:19):
M A T. T O. S O. W s ki
dot com. You can email me at easy at better
offline dot com or visit better offline dot com to
find more podcast links and of course my newsletter. I
also really recommend you go to chat dot Where's youreed
dot at to visit the discord, and go to our
slash Better Offline to check out our reddit. Thank you
(41:40):
so much for listening.
Speaker 1 (41:42):
Better Offline is a production of cool Zone Media.
Speaker 2 (41:44):
For more from cool Zone Media, visit our website cool
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Speaker 1 (41:50):
App, Apple Podcasts, or wherever you get your podcasts.
Also media.
Speaker 2 (00:06):
Hello and welcome to Better Offline. I'm your host ed Zitron.
Once again, we are here to talk about the Department
of Justices case against Google Ads. Today, of course, I'm
(00:27):
joined by Jason Kint, the CEO of DCN. We've got
a special guest as well, Ariel Garcia, director of Intelligence
to ad Transparency nonprofit Check My Ads. Ariel, Jason, thank
you so much for joining me, Thanks for having us. Likewise,
so Aria, why don't you tell me a little bit
about the end of the Department of Justices case. Anything fun,
(00:48):
interesting or scandalous happened in the last week.
Speaker 1 (00:51):
Yeah, I will say it was definitely a markedly slower
week than it was last week. A lot of the
testimony that we heard was simply for the purpose of
getting exhibits into evidence, but there were a couple of
things that stood out. We started the week with Neil
Mohan and the big revelation.
Speaker 2 (01:10):
There who is Neil Mohan?
Speaker 1 (01:13):
Well, he is now CEO of YouTube, but he came
over with the Double Click acquisition, and so what one
of the big focus areas of his testimony was about
the ad meld Yield Manager acquisition, and we saw internal
decks where they were discussing whether or not to purchase
(01:33):
and a yield manager.
Speaker 2 (01:35):
And what does that mean as well?
Speaker 1 (01:37):
So it basically helped publishers optimize yield. Jason, you can
probably add more color to this than I can. Like, Okay,
now there is one important point. There's two kind of
component functionalities that ad meld had. One was the yield
management functionality and the other was real time bidding, right.
Speaker 2 (01:59):
And just clear, yield management is managing the amount of
money you make from your ads.
Speaker 1 (02:04):
Yeah, it is. Like I said, I'm not on the
publisher side, so I don't know that I've never worked
in one, but I can I can certainly talk Google ads.
But anyway, what Google did when it ultimately did buy
ad meld was kill the real time bidding bit. But
we'll get to that. So we see a deck where
they're debating whether a yield manager would be a good
(02:26):
investment to make, and it says in the deck that
their tech is irrelevant to Google. And then we see
that they paid I don't remember the exact number, but
I think it was like one hundred million over the valuation.
And before that, we see an internal exchange where Neil
says something to the effect of, well, we could just
(02:47):
buy it and park it somewhere. So they were upset
that yield managers were starting to gain traction. It ran
the risk of disintermediating DFP, and obviously that would cause
risk to revenue through add X, which was very, very
profitable for them.
Speaker 2 (03:04):
So just break it down in simple terms for a
simpleton talking about myself here. So by killing off this product,
this yield management company, it means that they would stop
people being able to optimize how much they make. What
are the ramifications of doing this.
Speaker 1 (03:20):
Well, remember that it came with the real time bidding
functionality as well. So what this was really about was
two things. It was to again protect their addex revenue,
but also to make sure that DFPS that double click
for publishers stays critical. And so what they did was
(03:44):
they took it in. They built in some of the
core yield management functionality into DFP. They integrated that, but
they got rid of real time bidding so that they
can keep you know, restricting and setting the rules for
the auction on their side.
Speaker 2 (04:00):
Oh, so they deliberately killed a useful product that they
owned as a means of as a means of making
the product worse so that they would make more money.
Speaker 3 (04:08):
And they didn't kill it, they parked it. And then
we had Neil try to explain that park didn't really
mean what we all thought it meant. It just right
to continue to operate it status quo for now.
Speaker 2 (04:19):
That classic word park that I use to refer to
operating something and using it. That's why it's called the
car park, and you drive on it exactly.
Speaker 1 (04:30):
It's like, so we hear something else very similar. While
we're on that topic. The other one of the other
spicy things that happened was we heard from Jonathan Bellach yesterday.
He's another longtime now ex Google employee that came over
with the Double Click acquisition, and with him they were
talking about exchange bidding, which was basically the product that
(04:52):
Google launched to kill header bidding. And we see an
email about how their goal is to make exchange bidding
slightly better than header bidding.
Speaker 2 (05:05):
So the deoder bidding is the open source at network approach.
Speaker 1 (05:09):
That's correct, so well, not add network, but like header
bidding rapper, it allows them to bid without like Google
getting first looked. It enabled a fair auction, right.
Speaker 2 (05:21):
Oh, Google will never have that then.
Speaker 1 (05:23):
So what we see is that their goal was to
roll out a exchange bidding so that it's slightly better
than header bidding, and the DOJ asks, Uh, Bellak, why
slightly better? And he explains the context as his goal
was for his team to roll out a product that
(05:44):
is as much better than header bidding as possible, but
the direction from leadership was to scale it back to
only slightly better, And the DOJ asked him why that
is is it was it because they wanted to protect
the ad X revenue and he said something to the
effect of you're gonna have to ask leadership about that.
(06:05):
So that was another interesting one, right about how they
like intentionally. Oh and by this point they also mentioned
that header bidding innovation had continued and so by this
point exchange bidding would be inferior. Right, So that was
certainly interesting and also told like a bit of a
more nuanced story about the fact that even if the
(06:28):
product organization wanted to do right by their publisher customers,
they were hamstrung by leadership.
Speaker 2 (06:34):
That's very good. I think that's what we say. It
does feel like this. I don't think there's any open
and shotcase and anything like this. But it does feel
like Google's egregiously taken the piss in a lot of this,
in a lot of these scenarios. That feels like there's
been a lot of testimony and discovery that's just them saying,
(06:54):
what if we made it so that no one else
could do this and we would make more money than
them through monopolis, Like it feels almost two on the nose.
Speaker 1 (07:03):
Yeah, no, that's fair. And then I'll save my last
one big highlight that is one that not too many
other people are talking about, so I'm making sure to
talk about it all the time. So during Brian o'kelly's
deposition tape, he used to be CEO of Upnexus, now
he is CEO of Scope three. During the end of
(07:25):
his deposition tape, he talks about how pre Bid, which
is the open source thing that we were talking about
before kind of pre bid was brought to IAB tech
Lab that typically will govern like open source standards and
stuff like that. They wanted tech Lab to take over
the governance of the pre bid standards and IAB tech
(07:51):
Lab rejected it. Why because Google vehemently objected. Obviously they
were worried about the thread at post to them, and
so that's why Prebid became its own separate nonprofit. So
we also Brian flags that Google at the time at
least was the biggest financial contributor to IAB.
Speaker 2 (08:14):
And what is IAB just for the.
Speaker 1 (08:16):
Listeners Interactive Advertising Bureau. The tech Lab is a separate entity.
To be clear, there is some overlapping governance, but I
just don't I know that there will be a barrage
of people that say they're separate. So I am acknowledging
they are separate entities, but there is overlapping governance. The
IAB Tech Lab has a lot of standards, like they
(08:38):
have the open RTV standards. IAB itself has its own
standards or frameworks that it oversees. But in terms of
like the technical standards, that's that's under the IB tech Lab.
Speaker 2 (08:49):
So the the kind of like a professional association for
the ADS industry or did you ads?
Speaker 3 (08:54):
Yeah, ads, ad tech, etcetera. I mean this one just
to jump in this one to be fair, I was
I was not in the courtroom when they read this
one in when they show this deposition, so I saw
the news report on it in at exchange, I think,
but you know this is a situation where app Nexus,
the largest independent ad tech company out there besides Google
(09:17):
at the time, you know, had this open source code
that they developed with other players to open up the
auctions and create a fair environment against Google. And the
report is and what Brian O'Kelly, the CEO, testified Undrowth
is that, yeah, that they had this and they want
to donate it to the industry. Right, So you got
(09:38):
this industry association that's supposed to be for the betterment
of the entire industry, and one company's interests weighed in
heavier than the rest of the entire industry, which is,
you know, a very clear symptom of the problem we're
talking through in all these lawsuits, right, is that one
company's interests outweigh everybody else and they just continue to
gain more and more market share. So it's very that's
(09:58):
very concerning. I didn't shed like good light on IAB either, frankly.
Speaker 2 (10:02):
So it feels like we are at this point in
the ads industry where things are. If Google is broken
up in the way they're suggesting, it's going to have
more ramifications than just for Google. It feels like there
are organizational shifts that will have to happen as a result.
That's right, those who have aligned with them at.
Speaker 3 (10:21):
Least, that's right. And I think in a moment like this,
because we are geting you this moment frankly between the
search opinion and now this trial where it seems to
be headed, sometimes it's hard to think through what this
means and the collateral damage, and people worry about the negative,
but it also creates a lot of opportunity, right, and
so it unlocks and creates oxygen for everybody. And that's
(10:43):
that's the that's the fun part.
Speaker 2 (10:45):
So have we had anything more about Jedi Blue, Jedi Blue,
the Facebook Google deal? The is a big deal or
isn't a big deal, depending on who you ask.
Speaker 3 (10:54):
I looked at Texas and Q one him next year.
Speaker 2 (10:58):
That is that where the suits are happening.
Speaker 3 (11:00):
That's where the state ag suit is, and that's where
they were able to depose so Narbashi and they were
able to depose the Facebook witness. It's come up in
a few different ways and its it continues even today
where you know where they are trying to bring Facebook
in as a competitor in this relevant market that this
(11:20):
suits all about. And you start to it's the threat
of Facebook coming into the market. But the rest of
that story is that Facebook didn't really come into the
market because they had a sweetheart deal with Google to
not come into the market, right, And so we're not
telling the rest of the story right now, And I
think it's because the US Department maybe doesn't need to
tell the whole story. They already have enough. But but
(11:41):
I don't know if you have a different read aerial.
Speaker 1 (11:43):
No, I think that's right. I mean, you're exactly right
that it came up like once, But I also agree
that's part of the contortion that they're doing. Then the
other part of the contortion is still like the market
definition contortion. Like just just today, at the very end,
and they were they were going through we started to
(12:03):
hear from a Microsoft employee Beneezer, I'm bla. I think
it was is it Ben Jon? That's it was Ben Jon,
And they were talking about how Xander had helped Microsoft
gain a foothold in ad tech. But if you actually
read the document's Google was pointing us to, it was
(12:26):
talking about how Xander invested in video. So we're still ignoring,
we're still ignoring the display market. And they're like systematic
control of it. They're just kind of pointing to all
of the other areas that that they that they haven't
yet taken completely over just yet.
Speaker 2 (12:54):
Well that kind of leads us to the next part.
So it sounds like that we're recording Friday, September twentye
My iPhone has still not arrived. So Google is now
on the stand. So walk me through it, jas, wonn't
you stont sure?
Speaker 3 (13:06):
So they bring up their first witness, who we don't
know a lot about because he seems to have disappeared
off the internet, but he's been there for nearly two
decades and he's one of the few people that didn't
leave when the lawsuit was filed. And you know, most
of the Google led defense, the Google attorneys were focused on,
(13:27):
I think two things. One was having him draw out
on a visual the entire ad tech supply chain and
all of Google's components of it, which you know, at
first seemed to seem like a good strategy to kind
of confuse the room and the judge, but I think
at the end of the day it was more annoying,
(13:48):
and it actually it just showed that they were all
over the entire marketplace, right and so it was just
a lot of smoking mirrors. And then the other piece
was to try to bring in this element of all
these different products serve other types of advertising, be it video,
be it app advertising, be it native advertising in stream,
(14:14):
and so all these different things that are not actually
part of this case, to try to make advertising a
larger market than it really is, to make Google look
less of a major player. Right, so if you can
actually bring in Facebook and TikTok, or you can bring
in Netflix advertising for video, then suddenly Google's not such
a big player, right. But it just didn't It didn't work.
(14:37):
And when the Justice Department followed up, they actually just
pulled up an email from this witness where he actually
went through and talked about their business in those exact ways,
and it really negated everything he had testified. And and
you know, there are a couple kind of elements of
the judge also seeming to get a little bit annoyed
(14:58):
and kind of ready to move on.
Speaker 2 (14:59):
So but oh yeah, yeah, it also doesn't seem like
their defense is any good. It's really it's just very
weird because the Search trial, they were all piss and vinegar,
They were like ready to rumble. This one, they're coming
in They're like, well, look this is what we got.
Our first witness, who you will see has emailed literally
(15:20):
what we're going to claim. He isn't saying. It's just weird,
like they just seem almost discombobulated.
Speaker 3 (15:26):
Yeah, it felt this is their first witness, right, so
they needed to start strong. It did not. It was
not It wasn't strong. And then I mean towards the end,
just to kind of give the highlights, the two things
happened one and this is when Google's attorney was up,
but she wanted to bring up some more recent things,
(15:47):
right like the trade desk one of the companies they
compete with their earnings from last month. She wanted to
bring up something from the earnings last month, which is,
you know, a year after Discovery had closed. Like this,
it's not you know, it's like a very clear objection
for the justice.
Speaker 2 (16:02):
And that's yeah, that's like something you kind of just
kind of.
Speaker 3 (16:05):
Keeping like exhibit. It's non exhibit. It's never been you know,
asked about, it wasn't part of the deposition. It's literally
from a month ago. And they wanted to bring up
a deal that they've done with Twitter from the last
few months, right, And so the judge was like, you
know this stuff is not you know, it's too early.
She said something like, plus it's tainted, like once all
(16:25):
the lawsuits started being filed, like all this stuff is tainted,
you're giving me And so that was interesting. And then
she said, and you're also talking about this entire ad
tech ecosystem and that feels more like something for remedies
rather than liability. So she was saying, like, let's talk
about this when we start to break you up, or.
Speaker 2 (16:44):
We won't come back to this.
Speaker 3 (16:45):
We'll come back to this when we So everybody in
the court kind of looked at each other and made
their notes. But I know at the same time, you know,
I don't know if that's definitely a leading in care
where she's going, but it got our attention.
Speaker 2 (16:58):
So have you have you seen anything solid from Google? Like,
have they had any wins so far? No?
Speaker 1 (17:09):
Like, it sounds like it sounds like I am saying
that because I want to believe it and not because no.
Speaker 2 (17:16):
No, I truly don't think you like that. I wouldn't
bring anyone on who is just like we. I may
want them to lose, but I want them to lose properly.
Speaker 1 (17:23):
Yeah, no, since sincerely they do not have a strong argument.
The fact that their their first witness landed with the
judge as though they were trying to basically say, well,
wouldn't it be like super complicated to blow us up
if that's your best argument, like what you know? And
then the fact that that that again first witness, and
(17:47):
it felt a little bit like they were resorting to
tricks and bringing in documents that weren't part of discovery
and that that haven't been asked about. It's not, it
just wasn't. It was not a strong way to start.
They also their their ad Tech spaghetti football situation. The
d o J went up there and they're like, okay, can.
Speaker 2 (18:08):
You explain what that is?
Speaker 3 (18:09):
Okay, so it was that was the judge's description. So cool.
Speaker 1 (18:14):
So they bring up a gray oval on on the screen,
like a ball shaped oval, and then they ask him
to start mapping out the ecosystem and he puts they
put ad Tech ecosystem at the top. They put like
buy side on the right, uh, cell side on the left,
(18:36):
and then he starts populating it with with Google products first,
and it's all Google products. So it's like okay, like,
let's start with search and O and O and then
like like they golled ad sense for content, ad sense
for search. They go in order and they explain the
history of why they're absolutely everywhere, and then like there's
(18:57):
so now by this point and they met they draw
lines connecting everything. So at this point it's a mangled
mess of Google logos and unnamed alleged competitors Like so
it was, Yeah, it was like a big bowl of
ad tech spaghetti where Google is the is the meat
balls absolutely everywhere and some competitor flex are in there
(19:20):
a seasoning. It was, it was, And then the DOJ
gets up and they're like, first of all, we need
to preserve this because we're going to come back to it.
So they preserve that.
Speaker 3 (19:29):
Thank you.
Speaker 2 (19:30):
The way the.
Speaker 1 (19:31):
Gets up and they're like, okay, so if if if
I am a publisher, if I'm Wall Street Journal and
i want to sell ad inventory on my website and
not and I'm not on my app, right, will search
help me do that? We'll ad center search help me
do that. And they go down the list one by one,
removing the things that do not help them monetize display
(19:53):
ad space on their website and we get to basically
exactly where the OJ's complaint started, with the exception of
because he was on the cell side, they didn't touch
the DSP like they left DV three or or they
got exhausted with them with this, but but we got
to exactly why, Like to me, it actually would this
(20:16):
was the best way to explain to the judge why
their complaint outline the markets that it did. So in
my view it kind of completely horribly backfires published anywhere.
Speaker 4 (20:27):
The spaghetti will yet the monstrative football I should say
food was a was a theme today because even with
the first witness this morning, who was the expert the
last expert for the DJEE.
Speaker 3 (20:43):
Yeah, and Google was really trying to confuse the judge
and confuse him and he was really sharp and did
not fall for a lot of things that they tried
to get to bite on. But well, bad pun. Sorry,
but but Google's attorney was bringing up trying to bring
up product differentiation, I think, and I think was at
the time was trying to explain why they charged twenty
(21:05):
percent for their att exchange for the last decade while
everyone else charges a lower rate and why they could
justify this higher price and it wasn't just because of
monopoly maintenance, and so he was talking about differentiating higher
value from lower value. I think so he brought up
like he was. Well, first he brought up I think
chips and gasoline at gas stations, but then he brought
(21:27):
up the Whopper versus the Big Mac, and then he
brought up coke ver Stepsi and the judge at some
point interrupted and said, you must be really hungry this morning, so.
Speaker 2 (21:36):
You don't need the judge saying stuff like that.
Speaker 3 (21:39):
It's not it was. I think she was amused. She
was trying to bring fun to ad tech after ten
days of watching Google get tortured. So he also did.
Speaker 1 (21:48):
Not Chiquita bananas versus I'm like, nice, Well, at least
today instead of comparing apples to oranges, they're going to
do bananas to bananas. So it's progressed Jesus.
Speaker 2 (22:01):
So what is Google's argument? What is that actual?
Speaker 3 (22:05):
They just lost on market definition, They've lost on you know,
they lost on confusing the judge. I think I think
they're down to the maybe the two sets. It's this
MX case of two side and market versus if it's
one market, the whole thing versus individual markets. But I
don't everybody talk to doesn't think they have a prayer
there can you woke me through it?
Speaker 2 (22:24):
Despite its flimsiness.
Speaker 3 (22:28):
Well, one, I'm not an expert on the MX Supreme
Court case. But if you think about a credit card
transaction where on both sides it happens all at once,
then there is a case that went Spring Court. I
think it was Ohio versus I think it's OOMX. I'm
(22:48):
now outside of my boundary, but this idea that it's
a single market and both parties are transacting together at
the same moment versus this is a market. There's clearly
a byside, clearly a cult side, there's different actors on
both sides, and there are companies that you know, a
couple of companies that participate in multiple places just they
(23:10):
can't really compete. So it's it's very different than a
single credit card transaction.
Speaker 2 (23:14):
If it makes also, no, I'm pretty stupid, but something
obvious here seems to be that doesn't google bit at
the beginning and the end of the auction. It's right,
then that really isn't one thing happening in an instant, that's.
Speaker 3 (23:28):
Several things, multiplaces where it comes together then into a yeah, yeah,
there's and there's a bunch of different things, right. There's price,
there's prices that you know when you buy from MX
it's a single transaction. You don't have an auction. There's
there's lots of different things here that I think just
fall apart.
Speaker 1 (23:41):
So and they also try and make it sound like
it like in order like inherently in order to serve
one side, you have to also serve the other side.
That is simply not the case. Like, yes, there are
a few companies that have have or had before they
got driven out of the market, a DSP and SSP
(24:01):
and an ad server, right, but there are also standalone
DSPs there standalone ad servers, a handful of them left, right,
they're standalone exchanges. So it kind of falls apart in
that way as well. But I agree that that is
the only art I think. Unfortunately for them, they've put
(24:21):
all of their eggs in that basket. The other arguments
that they're making about pro competitive rationales are just very flimsy.
I actually, I mean it's so I made buzzword bingo
this week. I made Bingo cards and I passed them
out to the press box but it's every day we hear.
(24:43):
They're trying to convince the court that the fees for
their products and their growth is justified by the better
quality of their products. So they talk a big game
about inventory quality and inventory curation via add acts that
they vet. They vet the ad advertisers that are allowed
to advertise there, They that the publishers that are allowed
(25:05):
to monetize, and its like it just has in reality.
They talk about.
Speaker 2 (25:13):
Real good if you don't use the Internet.
Speaker 1 (25:16):
They talk about spam, malware, ad fraud, brand safety. So
they're trying to hold out their product as like the
pinnacle of these things. The interesting thing is from the
economists perspective quality is the way that they describe that
Robin Lee described quality is for publishers that would be
(25:36):
yield revenue money like that, that would be quality, and
for advertisers it would be ROI. So it's a it's
a lot of like chickens talking at ducks and using
words to describe different different things. The other thing I
would say that they're doing is they jump from perspective
(25:57):
to perspective depending on when it's convenient, right, So if
something is harming publishers, they'll talk about how it benefited advertisers,
But the question here is about is about the impact
of publishers. They do that all day, right, So that's
the other kind of little bit of a game that
they're playing. They're trying to show that where something was
(26:17):
bad for publishers, it was good for someone else. And
I think that the DOJ has done a good job
of also deconstructing that through largely through their expert witness testimonies.
Speaker 3 (26:31):
Yeah. The one other thing I add on the pro
competition because I felt like I got a taste of
it at the end of today, is and there's the Google.
The first witness. They were talking about the mission of
Google to fund the information of the world and where
that probably will go. And I saw this with a
search trial and I saw the app store trial they
(26:51):
Googled member. They lost both of those, but they tried
to make an argument that all of this conduct and
all this wealth that we're creating through through this Android
operating system and through this ad marketplace that we create,
actually helps fund this entire ecosystem. Right, So if you
can argue that, you know, all the way that they're
(27:12):
running their conduct to create a bigger ad market actually
ends up driving more revenue through to publishers. Then that's
they would argue that that's pro competitive even though they're
taking more and more of the money over time, and
and they're the one that's worth you.
Speaker 2 (27:27):
Know, to again through the debt thing that we talked
about last time A published it dat. Yeah, that kind
of very severely undermines their argument. Jason, you were at
(27:50):
the such trial. You said, Yes, how has Google felt
different between them? Is it the same attorneys? Is different attorneys?
Is there? Their argument sounds much weaker at the very.
Speaker 3 (28:01):
Least totally different set of attorneys. And I would say
that this case is more complicated, so there's a bigger
opportunity to try to confuse things. Where the search case
really came down to, you know, would the judge understand
(28:23):
and when be able to prove the network effects and
the importance of scale with data and then you know,
is buying out the exclusive search slot is that truly
exclusive or is that just a preference, et cetera. So
like there's this definition of exclusively conduct anyway, so that
one was more I think a matter if you had
(28:43):
to play it out and you got to see some
of the bad conduct. But it was ultimately going to
be based on some legal analysis where this one. You know,
the actual storytelling is really really important on both sides.
And you know, to be fair, we're only a half
a day into Google's defense, but it looks like the
the just departments got a lot better material.
Speaker 1 (29:05):
So there there is one thing I was reminded of
as you were talking that I'm actually curious to get
your take on while we're here. I think if there
were one argument that seems to be landing somewhat with
the judge, it is this idea that in order to
they're being asked to provide access to their customers, or
(29:28):
they're being they're being asked to allow things that would
require them to build new functionality for their tools. I
don't understand how that would land, even even even if
we buy that they would have to build these things
like how many millions do they make in a minute.
(29:48):
So I don't I don't really understand, but I just
I say that because I know. I think today the
judge did ask the expert witness, or she allowed a
line of questioning to continue that seemed to indicate that
this is an area that she is thinking about. So
I was curious about your take.
Speaker 3 (30:07):
I mean, at risk of ed asked me to explain
another Supreme Court decision. I think that that's trying to
get at the other defense that Google try to lay
out there walking in, which is this Trinco case that
basically it's a refusal to deal, that a duty to deal,
and does does a company have to actually enable its
(30:31):
rivals or provide APIs or allow its rivals to use
its products? But that's not really central to the case,
and it's really a matter of they tied their markets
together and force the customer bases to use them and
so but I think that's the line of defense they're trying.
Speaker 2 (30:48):
To be also being discovery throughout this case, where people
just talk about addicts sucking, there's that being a shitty
product that sucks.
Speaker 3 (30:57):
It's cost twice as much and it's not as good.
Because yeah, I mean, that's it's a definition of monopoly.
Speaker 2 (31:02):
Right, Yeah, it's it really feels like we're watching an
empire crumble. It's so strange because you you look at
these companies for years, it's these kind of immovable beasts,
these titans that will never be broken. But when they're
in front of the Department of Justice, Like I don't know, man,
Like it's actually good we do this, like look at
(31:23):
my look at my annoying drawing I did, Like what
do you think? Like it's just strange, like how it
was always this flimsy, really interesting to watch them have
to draw it out in that spaghetti football on a
screen and not be able to use any other fancy
video and storytelling beyond you know, the attorney at the
electron and a single visual on the wall, and you know,
(31:47):
everybody in the courtroom is watching Google pass post it
notes back and forth from its attorneys to it's cobbs
people to run out the door and try to tell
their story outside the courtroom because there's no TVs or
you know, audio ittever one. That was one thing that
you tweeted out that I'd love to talk about, though,
some of the pre briefs that Google had been doing
around Google Ads. I would love to talk about that,
(32:09):
primarily fiend of the show Casey Newton, who had the
Google's Google's lawyer's hand up his asshole, not literally, but
he was doing ventral Chris bullshit. So there was a
story towards the end of October twenty twenty. I believe
where Casey Newton on Platformer I apologized was suggesting anyone's
hands with anywhere near anyone's unmentionables there It's not true. However,
(32:33):
Casey clearly he and as part of the discovery, which
I will link in the episode notes, Jason, you posted this.
It's they briefed a bunch of journalists, including Casey Newton,
and then Casey Newton put out this piece which is like, yeah,
here's why I think the Google the Google's argument against
the oj Ovisa it's actually good. But also, yes, I
(32:57):
went and chased that bad boy down. Tell me the
little bit about these briefs because so I.
Speaker 3 (33:02):
Didn't want to call any individual because that's my job.
They're they're yeah, so you know what we saw. What
we saw was when the the Justice Department filed its
search complaints again, which is the one they just won
in August. So I, like, I tried to remind everybody
that when I when I shared that thread is this
is a complaint that was filed and then they lost.
(33:24):
People lost this right, It's a winning complaint by just department.
And what we saw was google systematic reaction to when
that complaint was filed, and all the people that they breathed,
the friends of theirs that went on air on television
to defend them, the editorial boards that they pitched, that
wrote pieces, and most of those pieces were all here's
(33:46):
why the just Department has filed a lousy case. Here's
why Google's going to win. Here's why, you know, people
don't understand how important Google is to our world. And
it turns out all those people were wrong. And you know,
and when you're writing a piece like that with the
high take the day the complaints filed, and I guarantee
most of them never read the complaint and never saw
the you know, the discovery that then came afterward. Yeah,
(34:10):
you're bound to be wrong if you're just listening to Google.
And so yeah, yeah, it's the spin machine.
Speaker 2 (34:17):
And I will just not not put any words in
anyone's mouth other than my own case. You in October twentieth,
twenty twenty. This piece is quite long. I'd say it's
about fifteen hundred and two thousand words, and it talks
about where the where the DOJ's case is weak for
quite some time, but then at the end says he
spoke with a spokesperson but it is word for word
basically what they wanted him to say. It's just shameless.
(34:39):
It's such shameful shit. Not talking specifically about Casey anymore
so that you guys can say something. It just sucks
because look, this case is, as we are finding over
these episodes, deep and weird to pull apart, and the
same as with search as well. And there's nothing wrong
with showing both sides of it. But at the same time,
(34:59):
I feel like being briefed by Google's lawyer is not
actually showing both sides.
Speaker 1 (35:04):
That's right, I mean, that's why, that's why I'm so
happy to be here throughout, even though it's obviously massively
disruptive to my regularly scheduled life. But that's but that's
exactly why it's so important. Google has so many resources
at their disposal. They have such a well oiled spin machine,
(35:26):
and it's very difficult to cut through the noise to
give perspective on actual reality. Right, So, like, yes, I
absolutely have my opinions, but it's been equally as important
with this trial to give people resources to develop their
own conclusions and to do their own analysis. So, like
(35:47):
we we've been pulling the exhibits into a way that's
more organized to just try and empower people to.
Speaker 2 (35:55):
Usv Google ads dot com. We've been hyping it in
every episode is bad and work, but.
Speaker 1 (36:00):
Like, yes, so I absolutely love weaving in my commentary
into my updates, right. But the reality is a lot
of the resources on that website are just to that
there are resources so that others have things to look
at that aren't coming just from Google's comms team, you know.
Speaker 2 (36:17):
And I think the problem with Casey's peace that I
am going to bang on him a little bit because
he deserves it, is the I actually don't mind even
if someone agreed with Google, if someone was just like
I actually think this case is weak. Like Nili Pateau,
who have my problems with he said it was a vacation.
I don't know if I agree, but that came off
as nil given an opinion, which is fine, yeah, good
(36:39):
pr whatever, but still his opinion. What Casey did here
was presented as if this was some sort of objective analysis,
and I think that what frustrates me about a lot
of this is you also, I don't believe objective analysis
really exists. I think everything's subjective. But also if you are.
If you're going to talk to Google's law talk to
(37:00):
the Department of Justice lawyer if they'll even talk to you,
and if they won't, don't talk to Google's lawyer. Yeah,
because you are being influenced and Google has so much money.
It's not like you are helping a pop star. It's
not like you're helping your favorite author. You're helping a
multi trillion dollar juggernaut that controls chunks of the world's
economy and knowledge like lorn to their reputation. It's it's
(37:24):
just it's frustrating.
Speaker 3 (37:26):
The also, the thing we saw them celebrate at the
top of their summary, which is definitely a peeve of mine.
Everybody on Twitter knows, and I feel like I've made
a little bit of a dent. There is Google and
Facebook does this too. Puts a blog post up that's
labeled often as like news, and then they put down
basically a press release, and their whole goal is to
(37:49):
get people to share that, right, and so reporters, as
soon as they post, will then share that blog post.
And Google noted that half of the stories out there
had links to their blog post, right, which is basically
just doing their press for them and so yeah, yeah,
I mean, but to be fair and flip this around
in the positive, and it's where we kind of talked
(38:10):
at the very end last episode, ED, is that because
I reflected on this today, I'm sitting there in the
courtroom and I'm looking and I've got two full rows
in front of me of Google Comms people, two full rows.
But over on the left there were also three rows
of press, which we did not have in a search case.
They're in the room, Bloomberg, New York Times, you know, adles,
(38:32):
et cetera. They're all sitting there and they're hearing the
exact same thing because they have to be in the room,
which is kind of interesting. You know, they can't be
off walking the halls. They have to be in the room.
They're gonna miss it. And then RL's back in the
corner too, just nailing everything down and like so it
does feel like we've got actual eyes and ears in
the room and getting the facts out there in a
better way than the search case.
Speaker 2 (38:52):
And it also feels like the ad pers. I feel
like the digital ad press has been like often honestly
a few years where kind of worried they were going away,
they've come back quite aggressively here, and I don't think anything.
I don't think it's anything. If it's personal, it's just
because Google's been fucking around, they're finally finding out. I
don't think it's any particular agenda. But also I do
(39:15):
challenge you listeners if you think any of this is
reporters coming in with an agenda, look at the other side,
Look at what the tech industry has done using the media,
and look at this. We should be proud as members
of the media, of the ad tech press and how
they have gone about this, and how Arielle and Jason
are ruining their weeks going to this courtroom. But it's
(39:37):
great because this is an empire. In my opinion, this
is his opinion that needs to fall that it needs
to be fair. Why do you and I are normal
people have to compete like regular people, and these rich
bastards get to do more. It's just frustrating. I like
seeing them burn. I'm completely subjected by the way. I
(39:58):
do not pretend otherwise.
Speaker 3 (40:01):
All good, All good? It so yeah, so Google, we'll
have probably about a week left of defending itself and
then they'll be back to you know, maybe some rebuttals
and stuff, but then it'll be to the judges. So
about week left, I think yeah, I think by next Friday.
Speaker 2 (40:14):
Hell yeah, well I think I think we can call
it there. Jason, where can people find you?
Speaker 3 (40:20):
Jasonderscore Kent k I N T or you can always
check out Digital Content next dot org, who I work for,
and all of our resources and our accounts there too,
an Ariel.
Speaker 1 (40:29):
Ariel as Garcia or as dot org or USV googleads
dot com.
Speaker 2 (40:35):
I'm I'm everywhere, but also genuinely USV Google Ads is
so good. It is one of the best, the best
things out there. And you can read all of those
wonderful emails where they're just like, yeah, we love doing monopolies.
Be a little bit dramatic there, but thank you so
much everyone for listening. I'm of course ed Zitchron and yeah,
we'll have probably another at least one more episode on
(40:58):
this and then we can wrap it up. Thank you
so much, thanks for having us by, Thank you for
listening to Better Offline. The editor and composer of the
Better Offline theme song is Matasowski. You can check out
more of his music and audio projects at Matasowski dot com.
(41:19):
M A T. T O. S O. W s ki
dot com. You can email me at easy at better
offline dot com or visit better offline dot com to
find more podcast links and of course my newsletter. I
also really recommend you go to chat dot Where's youreed
dot at to visit the discord, and go to our
slash Better Offline to check out our reddit. Thank you
(41:40):
so much for listening.
Speaker 1 (41:42):
Better Offline is a production of cool Zone Media.
Speaker 2 (41:44):
For more from cool Zone Media, visit our website cool
Zonemedia dot com, or check us out on the iHeartRadio
Speaker 1 (41:50):
App, Apple Podcasts, or wherever you get your podcasts.
Host
Ed Zitron
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