Google’s Harmful Monopoly: US DOJ Raises The Curtain On Company’s Search Ad Price Manipulation

Search engine giant Google and its working as a dangerous monopoly has been the subject of debate for years. Many have argued against the company’s unfair practices and how other stakeholders continue to face loss.

Now, a new document by the American Department of Justice is proving to the world how Google ended up manipulating advertising auctions and inflating costs to better enhance its revenue.

The news comes as the America vs Google Antitrust trial featured closing arguments and the final decision is still up in the air. But from the looks of it, Google might not be able to continue with its powerful monopoly behavior without being penalized.

A lot of the closing arguments are presented in a massive 140-slide presentation featuring an emphasis on its unfair position as a search advertising specialist.

The DOJ called the behavior of controlling prices and excluding competition as mindblowing offensive and unfair. Also, the grand position that Google was in meant no other rival ad prices needed to be looked at, while other testimonies spoke about how no internal documents were even provided or asked for in terms of how it was allowed to carry out so many unfair pricing strategies. This is the power of monopoly.

Shocking quotes were brought into the limelight including those from several people at Google that discussed the rise of ad pricing to enhance the firm’s revenue. The company tried long and hard to attain better pricing strategies where new prices were bigger than the older ones.

Google had quite a few levers that it may utilize to alter auction designs for ads to get a profitable outcome where it could massively benefit. Let’s not forget the massive rise in prices for ads from 5 to 15%. Did we mention how other slides were used to prove another point?

Google Search ad CPCs ended up doubling in the 2013 to 2020 period.

Advertiser harm was never considered and Google continued to raise prices whenever it felt like it. This was a practice that Google referred to as tuning inside its list of documents while the Department of Justice mentioned that it was a sort of manipulation.

DOJ's closing arguments in America vs Google trial reveal Google's monopoly tactics, raising concerns over unfair practices.

Image: DIW-Aigen

Other than that, RGSP, format pricing, and even squashing were some technical terms used by the DOJ on this front. We’re discussing each of these briefly for better understanding purposes of our readers.

Format pricing is where advertisers do not pay more than a certain maximal bid as per the search engine giant. But Google silently rolled out another term dubbed Project Momiji that was curated to artificially inflate bids produced by runner-ups.

This meant a 15% rise in winning advertisers and greater revenue chances for Google.

Another point worth mentioning is squashing. This is where Google enhanced the advertisers’ life value depending on the CTR predicted from the highest figures. So what the company was really doing silently was increasing prices against top bidders.

The goal was to give rise to a broader array of price changes and to market increase across the board. This resulted in Google ad auction winners paying more instead of benefiting from squashing. And what that led to was the most negative user experience as the firm ranked ads sub-optimally in return for greater revenue.

Last but not least, Google benefited from activities like RGSP. This was another term reserved for Random generalized second price that came about in the year 2019. And that’s when we saw Google call it the ability to enable price hikes in small phases with time.

This didn’t lead to enhanced quality but Google promoted it as if it was the best pricing knob when compared to format pricing strategies. In the end, the DOJ concluded that Google’s lack of transparency and reporting provides more harm to advertisers as search marketers fail at highlighting poorly matching questions through negative keywords.

It’s a massive debate and one that Google has been denying for years. However, the anti-trust case has brought about some hope for advertisers who are forced to remain silent or pay the costs of raising their voice against the monopoly.

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