Google has utilized a secret program to track bids on its ad-buying platform — and has been accused of using the information to gain an unfair market advantage that raked in hundreds of millions of dollars annually, according to a report.
The initiative — dubbed “Project Bernanke” in an apparent reference to former Federal Reserve chairman Ben Bernanke — was detailed in court filings in an ongoing Texas-led antitrust suit, which were initially uploaded to an online docket with incomplete redactions, The Wall Street Journal reported Saturday.
In the documents, since re-filed under seal, Google reportedly acknowledged the existence of Project Bernanke and wrote that details of its “operations are not disclosed to [ad] publishers,” but denied that it gave the search titan an unfair advantage.
Lawyers for the Lone Star State argue, however, that the program was tantamount to insider trading, particularly when combined with Google’s complicated, multi-layered role in the online advertising marketplace.
The company operates simultaneously as the operator of a major ad exchange, a representative of both buyers and sellers on the exchange — and a buyer in its own right, according to the suit.
By using Project Bernanke’s inside information on what other ad buyers were willing to pay for space, Google could tailor its operations to beat out rivals and bid the bare minimum to secure ad inventory, the state reportedly alleges.
Project Bernanke helped Google rake in hundreds of millions of dollars annually, the court filings allege, according to the report — which does not make clear the initiative’s status today.
Separately, the filings reveal more details about Jedi Blue — an alleged hush-hush deal in which Google allegedly guaranteed that Facebook would win a fixed percentage of advertising deals in which the social media giant bid.
An unredacted section of the filing reveals that the deal was signed by Philipp Schindler, Google’s senior vice president and chief business officer, and Sheryl Sandberg, Facebook’s chief operating officer, among others, according to the report.
Google reportedly acknowledged in its initially-unredacted court response that it agreed to make “commercially reasonable efforts” to guarantee that Facebook could identify a majority of users in ad auctions.
Google also admitted that the deal required Facebook to spend $500 million or more in Google’s Ad Manager or AdMob bids in the pact’s fourth year, and that Facebook agreed to make efforts to win 10 percent of the auctions in which it competed, the WSJ said.
The arrangement appeared “to allow Facebook to bid and win more often in auctions,” lawyers for Texas alleged in their filings.
In a statement to the Journal, Google spokesman Peter Schottenfels said that the court complaint “misrepresents many aspects of our ad tech business.
“We look forward to making our case in court,” added Schottenfels, who directed the publication to a UK advertising group’s study that concluded Google did not appear to have an unfair advantage.
Neither Facebook nor the Texas attorney general’s office responded to the Journal’s requests for comment.