TRIAL UPDATE # 7: Former Google Ads Exec Calls Google a “Benevolent Dictator” in Court
October 13, 2023
Thursday marked the end of week 5 of US versus Google. We are officially at the midpoint of this landmark trial taking on Google’s monopoly in search and its unfair tactics used to dominate online advertising.
This week in court we saw a 2007 explosive email from Google’s Sundar Pichai before he became CEO decrying the bad ‘optics’ of Google's search engine deal with Apple; we heard from DOJ expert witnesses, including one of Google’s oldest employees at the center of its controversial Google search exclusivity deals with big tech companies; and Arjan Dijk, Senior VP and Chief Marketing Officer at Bookings.com, who called Google a “benevolent dictatorship.”
Before joining Booking.com, Dijk worked at Google for 11 years specifically working to persuade companies to use its ads platforms. He explained in court how dependent Bookings.com is on Google ads, which they spend millions of dollars on every year.
Throughout his testimony, Dijk referred to Google as the “one door” that allows companies like Booking.com to be reached by consumers. He explained: “If you want to be found on the web, there is one door that is controlled by Google and we need to use that door. We have to use Google.”The DOJ also introduced a Booking.com document to demonstrate the company’s view that it is “essential to be on Google search” and that the company would “lack [an] alternative to reach the same number of users” if unable to advertise on Google.
At one point, Google’s lawyer got a little hostile with Dijk, and then the judge intervened.
DOJ’s expert witness on digital marketing, Columbia Business School Professor Kinshuk Jerath, gave his assessment of Google’s advertising business, highlighting a quote from Google’s chief economist Hal Varian, referring to search and text ads as “different species of ads.” Jerath used the consumer purchase funnel to illustrate how search ads operate differently than others. He explained that search ads are at the bottom of the funnel and meant to harvest demand, increase desire for, and capture interest in a product. The purchase funnel is central to the DOJ’s argument that search ads are a separate and relevant market.
Next, Jerath concluded that effectively providing text ads requires large sales and engineering departments, and there are few alternatives that advertisers can go to other than Google. The reason why there are few alternatives, he explained, is because advertisers are looking for the most “eyeballs and attention” and the “lion share of searches are taking place on Google.”
Basically, Google’s success in the digital advertising sector can be attributed to the massive scale and market share of its search engine.
This week’s testimony from the DOJ’s other fact witnesses, Tracy-Ann Lim and Ryan Booth, established that Google gets away with making these unilateral changes because advertisers have limited alternatives to Google. Lim, JP Morgan Chase’s Chief Media Officer, and Booth is a Senior Manager of Paid Media at The Home Depot. Both testified to the reduced transparency in Google’s search query reports.
Google’s counsel spent a large portion of its cross examination attacking the DOJ’s reliance on the consumer purchase funnel, frequently dismissing the concept as irrelevant to digital advertising.
The week kicked off with Joan Braddi on stand, an old Googler who was the $1.7 trillion company’s 15th employee back in 1999. She currently leads all big partnerships for Google with Apple, Amazon, Microsoft, Meta, Oracle, and Yandex and her name came up on the first day of the trial. DOJ began its examination by asking about each partner, beginning with Amazon.
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When asked if she thought Amazon was a search website, Braddi said that Amazon has a “search product.” The DOJ then presented Braddi with an email she wrote in 2019, wherein she stated “Amazon is not considered a search site.” Braddi’s email directly contradicts Google’s persistent claims that Amazon is indeed a search website that competes with Google.
The DOJ went on to discuss Google’s relationship with Apple and the history of negotiations between the company and Google with respect to its Information Sharing Agreement (ISA). As part of the ISA, Google pays a revenue share to Apple to be set as the Safari browser’s default search engine. The ISA is particularly valuable to Google because it drives queries to search ads which in turn generates ad revenue. At the same time, it improves Google’s search engine because of the immense scale it enables Google to achieve by being distributed as the default search engine on all iOS devices. The DOJ asked Braddi whether Google determined if the benefits its gains from being the iOS default search engine was worth propping up its biggest mobile competitor, Apple. Braddi replied, “You could look at it that way.” She added that she was not aware of anyone at Google discussing whether paying billions to Apple would improve iOS as a mobile competitor to Google’s Android.
The DOJ then showed evidence of how Apple, from 2007 through 2012, repeatedly tried to renegotiate its obligation to set Google as its default search engine. At one point, the DOJ entered a 2007 email from Sundar Pichai, now Google’s CEO, to Braddi, in which he stated that Yahoo should be listed as a search engine option within the Safari browser. Pichai on Google’s default, “I don’t think it is a good user experience, nor are the optics good for us to be the only provider in the browser.”
The trial will resume on Monday with the DOJ's expert witness, Dr. Michael D. Whinston, taking the stand to continue his testimony. We expect the DOJ to wrap their witnesses and arguments next week and then Google will present its case for the second half of the trial.
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