Google quietly raised ad prices to boost search revenue, says executive

As the 2nd week of the US v. Google antitrust trial gets underway, the Department of Justice is focusing connected the existent moneymaker down Google Search: ads. It alleges that Google’s dominance lets it rise prices for advertisers with fewer repercussions — a assertion backed up by Google ads enforcement Jerry Dischler connected the stand.

Bloomberg’s Leah Nylen has the details of Dischler’s testimony, wherever helium describes statements helium made nether oath successful 2020. Dischler says Google tweaks its auction process successful ways that whitethorn person raised prices successful the past by 5 percent for the emblematic advertiser and could perchance person raised them by 10 percent for immoderate queries. The parties buying the ads would person been unaware of these “tunings” of prices; “we thin not to archer advertisers astir pricing changes,” Dischler said.

Raising advertisement prices was seemingly 1 mode for Google to summation hunt gross during adust spells — 1 of which seemingly occurred successful the outpouring of 2019, according to an email chain involving Dischler and chap Google enforcement Anil Sabharwal. “We are shaking the cushions” connected ads launches, Dischler writes successful the email. The email besides describes different options for boosting gross that see making Search much salient for Chrome users.

Another trial exhibit indicates that Google made $98 cardinal from hunt ads for its owned-and-operated services successful 2019 (apparently not including gross from YouTube, according to Big Tech connected Trial newsletter newsman Yosef Weitzman), and Dischler said that the fig topped $100 cardinal successful 2020. The “vast majority” of maturation has travel from mobile search.

Dischler said successful tribunal that 10 percent was astir the precocious bounds of terms increases and that raising prices by 15 percent would beryllium “a unsafe happening to do” — although, arsenic Nylen notes, Dischler acknowledged that wide gross mightiness inactive emergence adjacent if the precocious rates drove immoderate advertisers to competitors similar Meta oregon TikTok.

As Weitzman writes, demonstrating that Google tin rise advertisement prices with small competitory unit could assistance bolster the Justice Department’s statement that Google maintains an unlawful monopoly. It’s an objection that the section can’t rise for the hunt motor itself, which is simply a escaped merchandise for consumers — though it tin allege that different forms of harm, similar lax privateness standards, mightiness person been mitigated successful a much competitory hunt industry.

Dischler is resuming grounds contiguous successful the trial, which is expected to agelong into November, with a verdict not anticipated until adjacent year.