United States v. Google/Conclusions of Law/Section 7B
- B. Plaintiff States Have Not Proven that Google’s SA360 Conduct Had Anticompetitive Effects.
Plaintiff States’ SA360 claim falls short for a second independent reason: They have not shown anticompetitive harm. Plaintiff States contend that “Google’s conduct harm[ed] advertisers by diminishing the efficiency of their ad spend on SA360.” PSTB at 29. It also “harm[ed] rivals . . . by driving down demand for advertising on these search engines.” Id. at 30. The evidence does not support either contention.
Plaintiff States produced no advertiser testimony that the lack of ATB on SA360 reduced ad spend efficacy on Bing. No question, the evidence showed that the use of ATB resulted in increased conversions. FOF ¶ 285. But there was no evidence presented of any advertiser who wished to use ATB on Microsoft Ads but was left stuck using the less-effective, intra-day bidding on SA360 as a result of Google’s delayed integration. To the contrary, the evidence showed that some advertisers found other ways to place ads on Bing using ATB. For instance, some advertisers moved ad spend from SA360 to Microsoft’s native tool, which caused Google to worry that they would move even more spend away from SA360. FOF ¶ 288. Also, at least one major advertiser (Home Depot) began using a rival SEM tool, Skai, to take advantage of ATB for its Bing ad spend Id. And even if there were advertisers who desired to use ATB but could not because it was too costly to switch away from SA360, Plaintiff States offered no examples and the overall impact on the market remains uncertain.
As to Google’s competitors, the evidence of harm is similarly thin. Plaintiff States point to Dr. Israel’s analysis of Bing’s share of total spend on SA360 during the relevant time period, showing that the decline of ad spending on Bing accelerated after Google introduced ATB for Google Ads on SA360. PSFOF ¶ 268. The implication is that the lack of feature parity caused advertisers on SA360 to increasingly shift spend away from Bing to Google. But correlation does not equal causation, and Plaintiff States offered no evidence that any advertiser in fact shifted its ad spend away from Bing because of the absence of feature parity. Cf. FOF ¶ 233 (advertiser testimony that their relative text advertising spend on Google and Bing is constant).
Plaintiff States’ best evidence comes from Frederick van der Kooi, the former Corporate Vice President of Advertising at Microsoft, who testified: “The degree to which SA360 does or does not code to our latest features and functionality can impact us to the tune of hundreds of millions of dollars in revenue.” van der Kooi Dep. Tr. at 241:2-5. But the only evidence substantiating this statement is a series of email threads referencing an internal estimate of Microsoft’s lost revenue because of the unavailability of ATB and other key features on SA360. PSFOF ¶¶ 269–271 (citing PSX745 at 327–28, PSX746, and PSX754 at 336). Those emails acknowledge the “analyses have been very rough,” PSX745 at 327, and describe the loss estimate as “broad assumptions,” id. at 326; see also PSX754 at 255 (describing the figure as “a low precision estimate”). Importantly, no witness testified about the methodology used to produce the loss estimate. The court will not make an anticompetitive effects finding on such a shaky evidentiary foundation.
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Because Google had no duty to deal with Microsoft and, even if it did, Plaintiff States have not established anticompetitive harm, the court finds in favor of Google on the SA360 claim.