United States v. Google/Conclusions of Law/Section 6C

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United States v. Google
United States District Court for the District of Columbia

Conclusions of Law, Section VI. Effects in the Market for General Search Text Advertising

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4655391United States v. Google — Conclusions of Law, Section VI. Effects in the Market for General Search Text AdvertisingUnited States District Court for the District of Columbia

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C. The Exclusive Agreements Have Allowed Google to Degrade the Quality of its Text Advertisements.

Google’s text ads product has degraded in two ways: (1) advertisers receive less information in search query reports (SQRs) and (2) they no longer can opt out of keyword matching. FOF ¶¶ 269–278. Specifically, Google removed information from SQRs that provided advertisers with insight into low-volume queries, which diminished advertisers’ ability to tailor their ad strategy in light of such queries. FOF ¶¶ 272–274. Similarly, disallowing advertisers from opting out of keyword matching created thicker auctions at the expense of advertiser control. FOF ¶¶ 277–278. These are arguably small changes, but they reveal Google as a monopolist unconcerned about product changes that have decreased advertisers’ autonomy over the auctions they enter and the ads they purchase. Google has suffered no consequences because it does not operate in a competitive text ads market.^[1]

↑ Plaintiffs also assert that Google has depreciated SQR quality by removing information that allows advertisers to better approximate the final physical placement of their text ad. See UPFOF ¶¶ 1185–1192. Google’s SQRs used to include an “average position” component, which gave advertisers insight into their ad placement compared to other ads. See UPX8037. Google changed that metric to be more relative, telling advertisers only the percentage of their ads that appear on a prime location, phasing out average position metrics. Id. at .001; DX2021 at .001. Now, while advertisers understand how many of their ads reach the top spot, they do not have a similar understanding of the lower positions. But there was very little advertiser testimony that this change was harmful, and no evidence that it led to increased prices. See Tr. at 5177:11-15 (Booth) (while Home Depot “wouldn’t have the same specificity” without the average position metric, the change “certainly wasn’t catastrophic”). Amazon’s concern about the switch away from the average position insight adds some weight to the analysis, see UPFOF ¶¶ 1191–1192, but one advertiser’s desire for a particular product feature is not an anticompetitive effect in the market as a whole.

[1] Plaintiffs also assert that Google has depreciated SQR quality by removing information that allows advertisers to better approximate the final physical placement of their text ad. See UPFOF ¶¶ 1185–1192. Google’s SQRs used to include an “average position” component, which gave advertisers insight into their ad placement compared to other ads. See UPX8037. Google changed that metric to be more relative, telling advertisers only the percentage of their ads that appear on a prime location, phasing out average position metrics. Id. at .001; DX2021 at .001. Now, while advertisers understand how many of their ads reach the top spot, they do not have a similar understanding of the lower positions. But there was very little advertiser testimony that this change was harmful, and no evidence that it led to increased prices. See Tr. at 5177:11-15 (Booth) (while Home Depot “wouldn’t have the same specificity” without the average position metric, the change “certainly wasn’t catastrophic”). Amazon’s concern about the switch away from the average position insight adds some weight to the analysis, see UPFOF ¶¶ 1191–1192, but one advertiser’s desire for a particular product feature is not an anticompetitive effect in the market as a whole.

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