Over time, Google consistently took a 20 percent commission for ad transactions processed through its platform, even though it was higher than other industry players. Executives internally expressed concerns about the difficulty in justifying this fee. The Justice Department now argues that this commission is a clear indication of Google’s monopoly in the online advertising industry.
The focus on Google’s take rate emerged on the final day of the first week of the Justice Department’s antitrust trial against Google. By referencing internal documents and testimony from former Google ads executive Chris LaSala, the DOJ aimed to demonstrate that Google maintained its high fee without facing significant pricing pressure due to its dominant position in the market. The trial continues with further testimonies, including from YouTube CEO and former Google ads executive Neal Mohan.
Emails presented during the trial revealed Google executives’ concerns about the sustainability of the 20 percent fee charged by their AdX exchange for facilitating transactions. They acknowledged the need to align the fee more closely with market standards and customer demands.
Despite internal discussions, Google continued to enforce the 20 percent fee, attributing it to the unique demand generated through Google Ads that was not available elsewhere. The government aims to show that Google’s high commission was not solely for the benefit of all parties involved but rather to maintain its monopoly in the market.
Jonathan Bellack, another ad executive at Google, wrote in one 2018 exchange that the fee was “not long term defensible.”
In an email exchange in 2019, LaSala acknowledged the calls for transparency from buyers and publishers, questioning the long-term viability of the 20 percent fee.
Brian O’Kelley, founder of AppNexus, described Google’s 20 percent take rate as significantly higher than that of competitors.
Google spokesperson Jackie Berté emphasized that publishers retain the majority of the revenue when utilizing Google’s advertising technology, with fees aligned with industry standards. Google intends to present its own case once the government’s arguments conclude.
Google employees acknowledged the challenges publishers would face in switching ad servers, with only Disney successfully doing so by developing its own tool. The debate continues on the implications of Google’s pricing strategy and its impact on competition in the online ad market.
Tom Kershaw, former CTO of Rubicon, highlighted the challenges in bypassing Google’s AdX and accessing its vast advertiser network, emphasizing the limitations publishers face in choosing alternative ad servers.
