Case 1:21-cv-03446 Document 1 Filed 04/20/21 Page 1 of 60
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`ASSOCIATED NEWSPAPERS LTD. and
`MAIL MEDIA, INC.
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`Plaintiffs,
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`
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`CIVIL ACTION NO. 1:21-cv-03446
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`COMPLAINT FOR DAMAGES AND
`INJUNCTIVE RELIEF
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`JURY TRIAL DEMANDED
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`GOOGLE LLC and ALPHABET INC.,
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`-against-
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`Defendants.
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`INTRODUCTION
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`1.
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`Plaintiffs publish the online newspaper MailOnline, which is branded in the
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`United States as “Daily Mail.” Daily Mail began as a printed newspaper in London 125 years
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`ago, in 1896. Daily Mail introduced an online version of its newspaper in 2003, and opened its
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`U.S. headquarters in New York City in 2011. That same year, Daily Mail overtook The New
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`York Times as the world’s most popular English-language newspaper website.
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`2.
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`Daily Mail reaches over 225 million unique monthly visitors, with 75 million of
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`those visitors coming from the United States. Daily Mail publishes hundreds of stories daily,
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`using its home page to deliver the breaking news, politics, health, entertainment, and celebrity
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`content people want to read.
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`3.
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`Like most other news sites, Daily Mail does not charge readers for its online
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`content. The costs of employing reporters, editors, photographers, video journalists, and running
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`the website are paid for by selling advertising space alongside news articles.
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`4.
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`Daily Mail’s ad-supported business model is overwhelmingly popular with U.S.
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`readers. Eighty percent of Americans do not pay for access to news, and one recent consumer
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`survey reports that over 84% of Americans want an “ad-supported internet where content is
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`free.”
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`5.
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`Online advertising continues to grow overall as users consume more internet
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`content, yet newspapers’ advertising revenue has declined by 70% over the last decade. As a
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`result, since 2008, newsroom employment has dropped by more than half, 20% of all newspapers
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`have closed, and half of all U.S. counties now have only one newspaper, usually a weekly
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`edition. The circulation of daily newspapers has decreased by more than 40%.
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`6.
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`News publishers do not see the growing ad spending because Google and its
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`parent Alphabet unlawfully have acquired and maintain monopolies for the tools that publishers
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`and advertisers use to buy and sell online ad space. Those tools include the software publishers
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`use to sell their ad inventory, and the dominant exchange where millions of ad impressions are
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`sold in auctions every day. Google controls the “shelf space” on publishers’ pages where ads
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`appear, and it exploits that control to defeat competition for that ad space. Among other tactics,
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`Google makes it difficult for publishers to compare prices among exchanges; reduces the number
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`of exchanges that can submit bids; and uses bids offered by rival exchanges to set its own bids —
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`a de facto bid rigging scheme. Further, for years, Google has used its search rankings to punish
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`publishers that do not submit to its practices. The lack of competition for publishers’ inventory
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`depresses prices and reduces the amount and quality of news available to readers, but Google
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`ends up ahead because it controls a growing share of the ad space that remains.
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`7.
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`A series of decisions in this Court have found antitrust liability for manipulating
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`securities markets much like Google has done here. See, e.g., Iowa Pub. Emps.’ Ret. Sys. v.
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`Merrill Lynch, Pierce, Fenner & Smith Inc., 340 F. Supp. 3d 285 (S.D.N.Y. 2018); In re Credit
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`Default Swaps Antitrust Litig., 2014 WL 4379112 (S.D.N.Y. Sept. 4, 2014). These cases shared
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`Case 1:21-cv-03446 Document 1 Filed 04/20/21 Page 3 of 60
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`the same set of facts: dominant broker-dealers depressed prices by forbidding traders to compare
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`offers in real time, eliminating rival platforms that introduced competition, and trading on inside
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`information. This Court already understands conduct like Google’s and can provide a remedy.
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`8.
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`Google has acknowledged that much of its conduct occurred in this District, see
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`Texas v. Google, 20-cv-00957 (E.D. Tex. Jan. 19, 2021), ECF No. 28, at 4-5, and that the largest
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`share of its witnesses is located in this District, see Tr. at 49-50 (E.D. Tex. Mar. 18, 2021).
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`Likewise, many of the ad-tech companies that Google acquired (including DoubleClick), as well
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`as many of the rivals that Google has eliminated, were based in this District. Finally, New York
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`City is the center of the United States’ publishing and advertising industries. America’s largest
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`news and entertainment companies are based in New York City, as are more than 1,200 ad
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`agencies. This Court has a predominating local interest in restoring competition in industries
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`critical to New York’s economic health and the vitality of the publishing business. This District
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`is a “major jurisdiction” for addressing Google’s economic censorship. Cf. Harry Kalven, Jr., A
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`Worthy Tradition: Freedom of Speech in America 75 (1988).
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`9.
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`Competition enforcers throughout the world have condemned Google’s unlawful
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`monopolization. The U.K. Competition and Markets Authority identified Google’s misconduct
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`and the harm to publishers, but concluded it had insufficient injunctive authority to implement a
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`remedy. See Online Platforms and Digital Advertising Market Study Final Report at 20, 60,
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`394-406 (July 1, 2020) (“Google’s strong position at each level of the intermediation value chain
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`creates clear conflicts of interest, as it has the ability and incentive to exploit its position on both
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`sides of a transaction to favour its own sources of supply and demand.”). The Australian
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`Competition and Consumer Commission identified Google’s misconduct and the harm to
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`publishers, and is prescribing compensation and a code of conduct to remedy some of Google’s
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`Case 1:21-cv-03446 Document 1 Filed 04/20/21 Page 4 of 60
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`practices. See Digital Advertising Services Inquiry Interim Report (Dec. 2020). The U.S. House
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`Antitrust Subcommittee studied the conduct of Google and other platforms, collecting 1.3
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`million documents and holding seven hearings. The House Subcommittee found that Google is
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`harming “the free and diverse press” and endangering “political and economic liberty.” Final
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`Report and Recommendations, Investigation of Competition in Digital Markets, at 57-77, 206-11
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`(Apr. 15, 2021). In December 2020, a group of State Attorneys General filed suit against Google
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`alleging monopolization and misrepresentations similar to those described in this Complaint.
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`See Texas v. Google LLC, 20-cv-00957 (E.D. Tex. Complaint filed Dec. 16, 2020, Amended
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`Complaint filed Mar. 15, 2021). The United States and a group of State Attorneys General filed
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`suit against Google for monopolizing search advertising in October 2020, see United States v.
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`Google LLC, 1:20-cv-03010 (D.D.C. Complaint filed Oct. 10, 2020), and the U.S. Department of
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`Justice is continuing to investigate Google’s monopolization of the display advertising markets at
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`issue in this case. The leadership of both the Senate and House Antitrust Subcommittees have
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`introduced bills that, among other things, would provide additional resources to antitrust
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`enforcers to address Google’s conduct.
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`10.
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`Daily Mail brings this antitrust action for compensation and for injunctive relief to
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`restore competition in the monopolized markets and safeguard news content for readers.
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`PARTIES
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`11.
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`Plaintiff Associated Newspapers Ltd. (“ANL”) is a British multinational media
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`company registered in England and Wales and headquartered in London. ANL owns and
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`operates the Daily Mail and The Mail on Sunday newspapers, MailOnline (dailymail.co.uk and
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`dailymail.com), and several other publications. MailOnline is the world’s most read English-
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`language news site and, branded as “Daily Mail,” the fifth most popular U.S. news website.
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`ANL is a wholly owned subsidiary of Daily Mail and General Trust plc (“DMGT”), a company
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`listed on the London Stock Exchange that manages a portfolio of companies in the consumer
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`media, insurance risk, property information, and events and exhibitions sectors.
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`12.
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`Plaintiff Mail Media, Inc. (“Mail Media”) is a wholly owned subsidiary of DMGT
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`that manages ANL’s U.S.-based operations for MailOnline. Mail Media is a privately held
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`company incorporated and existing under the laws of the State of Delaware, with its headquarters
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`in New York, New York. On behalf of ANL, Mail Media employs hundreds of reporters and
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`editors, as well as ad-tech, operations, and ad-sales teams, in the United States. This Complaint
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`refers to ANL and Mail Media together as “Daily Mail.”
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`13.
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`Defendant Google LLC (“Google”) is a limited liability company organized and
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`existing under the laws of the State of Delaware, with its principal place of business in Mountain
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`View, California. Google is an online advertising company providing internet-related products,
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`including various online advertising technologies, directly and through subsidiaries and business
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`units it owns and controls. Google maintains an office in this District at 111 8th Avenue, New
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`York, New York 10011.
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`14.
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`Defendant Alphabet Inc. (“Alphabet”) is a publicly traded company incorporated
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`and existing under the laws of the State of Delaware and headquartered in Mountain View,
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`California. Alphabet was created as a holding company for Google in late 2015, and Alphabet
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`controls Google’s day-to-day operations. Virtually all of Alphabet’s revenue comes from
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`Google. Since December 2019, Alphabet and Google have had the same Chief Executive
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`Officer. As a result of Alphabet’s operational control, Google is Alphabet’s alter ego. This
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`Complaint refers to Google and Alphabet together as “Google.”
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`Case 1:21-cv-03446 Document 1 Filed 04/20/21 Page 6 of 60
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`JURISDICTION AND VENUE
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`15.
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`This action arises under Section 2 of the Sherman Act, 15 U.S.C. § 2, and
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`Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26. The Court has subject-matter
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`jurisdiction under 15 U.S.C. § 4, and 28 U.S.C. §§ 1331 and 1337(a).
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`16.
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`In addition to pleading violations of federal antitrust law, Daily Mail alleges
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`violations of state law and seeks relief thereunder. All claims under federal and state law are
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`based upon a common nucleus of operative facts, and the entire action commenced by this
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`Complaint constitutes a single case that ordinarily would be tried in one judicial proceeding.
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`This Court therefore has jurisdiction over the state-law claims under 28 U.S.C. § 1367(a).
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`Exercising jurisdiction over the state-law claims will avoid unnecessary duplication of actions
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`and supports the interests of judicial economy, convenience, and fairness.
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`17.
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`The Court may exercise personal jurisdiction over Google because Google does
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`extensive business within this District — including by providing the monopolized products in
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`this District to Daily Mail — and this action arises out of Google’s contacts within this District.
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`18.
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`Venue is proper in this District under Sections 4 and 12 of the Clayton Act, 15
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`U.S.C. §§ 15 and 22, and 28 U.S.C. § 1391, because a substantial part of the events or omissions
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`giving rise to Daily Mail’s claims occurred in this District, and because Google transacts
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`business and is found within and resides in this District. Daily Mail’s U.S. operations are
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`headquartered in this District; Google has admitted that its conduct occurred in this District; and
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`third party witnesses, including major news publishers, advertisers, and many of Google’s rivals,
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`are or were located in this District. At a hearing on March 18, 2021, in Texas v. Google, counsel
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`for Google stated that more of its relevant witnesses are located in New York than in California.
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`19.
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`Google’s conduct affects interstate trade and commerce.
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`I.
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`BACKGROUND
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`FACTUAL ALLEGATIONS
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`A.
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`20.
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`The Sale of Online Display Advertising
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`Today, 86% of Americans consume news content over the internet. Moving the
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`news online is a boon for news publishers and readers alike. The internet opens up new forms of
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`content — e.g., infographics, videos, photo essays — that publishers can deliver almost
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`instantaneously to readers. No longer must readers wait for the next day’s paper to get the news.
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`And the news they get is more engaging and impactful.
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`21.
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`The growth of internet-based content over the last two decades also has created
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`new advertising opportunities for online publications like Daily Mail. Rather than the static print
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`ads of the twentieth century, these publishers present what are known as “display ads” to their
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`readers — image, text, and video-based ads that appear on the reader’s screen alongside the
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`publisher’s content.
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`22.
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`For ad-supported publications like Daily Mail that do not charge for subscriptions,
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`selling space for display ads on the publisher’s webpage (called the publisher’s “ad inventory”)
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`is the publisher’s dominant source of revenue. Daily Mail generates more than 80% of its
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`revenue from display ads sold on its online pages.
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`23.
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`Generally speaking, publishers sell their ad space through two sales channels: the
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`“direct” and “indirect” channels. Direct sales are negotiated between the publisher and
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`advertisers, including advertising campaigns sold by the publisher’s internal sales staff. Indirect
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`sales occur through electronic trading venues called “ad exchanges.” Through these exchanges,
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`publishers auction off their ad space to the highest bidder. Because negotiating direct deals can
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`be costly, Daily Mail sells 99% of its U.S. ad inventory through indirect sales.
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`24.
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`Using either the direct or indirect sales channel, publishers like Daily Mail sell
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`their ad space to advertisers on a reader-by-reader and “impression-by-impression” basis. As the
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`reader loads a Daily Mail webpage, Daily Mail first checks to see whether there is a directly
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`negotiated advertisement to fill the ad space on the page. If there is no direct deal, Daily Mail
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`activates its indirect channel to auction off the ad space to an advertiser. Daily Mail chooses the
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`winning ad and loads it onto the webpage, all before the page finishes loading on the browser.
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`The process of auctioning off inventory and loading the ad takes less than half a second.
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`25.
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`This process is repeated for each reader and each page the reader visits on the
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`Daily Mail website. That allows advertisers to target their ads to the particular reader, depending
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`on the data available about that individual. Further, every page has several slots (each of which
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`is called an “impression”) where publishers can serve an ad. Daily Mail has millions of readers
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`and therefore fills many millions of impressions every day.
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`B.
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`26.
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`Ad-Tech Products
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`To facilitate the sale of these impressions, all within milliseconds, publishers and
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`advertisers use a chain of specialized and distinct products.
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`27.
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`A publisher uses a “publisher ad server” to organize and sell its ad inventory.
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`When a user visits a webpage, the publisher ad server accesses the reader’s anonymized user ID
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`from a “cookie” stored on the user’s browser. The ad server then checks whether a direct deal is
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`available to serve the impression(s) on the reader’s specific webpage.
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`28.
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`If no direct deal is available, the ad server calls “ad exchanges” to organize
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`auctions for each impression. As part of the bid request to an exchange, the ad server
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`communicates the reader’s anonymized user ID.
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`29.
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`Once called, each exchange requests participating “demand-side platforms”
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`(“DSPs”) to place bids on behalf of their advertisers. A DSP is automated ad-buying software
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`that advertisers use to buy display ad inventory. As part of the request to the DSPs, the exchange
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`passes the anonymized user ID, and the DSPs cross-reference that ID with various databases to
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`ascertain whether the reader is a good candidate for a particular ad. The DSPs, based on
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`advertiser demand and the available user information, then enter bids for the impression.
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`30.
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`Each exchange collects the available bids, picks a winning DSP, and submits the
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`winning bid to the publisher ad server. Because bids typically are presented as “Cost-Per-Mille”
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`(“CPM”), or the price for one thousand impressions, publishers make money when ads are
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`loaded on their pages rather than when users click on them.
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`31.
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`Finally, the ad server decides which exchange’s bid to accept. If the ad server
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`rejects all bids, it can place a “house ad” — e.g., an ad from Daily Mail advertising its own brand
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`— to fill the impression.
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`32.
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`Each ad-tech product exacts a fee for its services. The ad server charges the
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`publisher monthly depending on the volume of impressions served. Exchanges, meanwhile,
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`charge the publisher a set percentage (called a “revenue share”) of each impression’s sale price.
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`To account for that revenue share, exchanges submit bids to the publisher ad server on a “net”
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`basis, i.e., the winning bid submitted by its DSPs less the revenue share. Finally, DSPs charge
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`their advertisers a fee for their various services — including identifying relevant users and then
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`assessing whether the ads shown were effective.
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`33.
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`The below graphic depicts the relevant ad-tech products, with buyers (i.e.,
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`advertisers) on the left and sellers (i.e., publishers) on the right.
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`Figure 1: Ad-Tech Products
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`34.
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`Google is the dominant player for each of these ad-tech products, and thus
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`controls the buying and selling of display ad inventory across most of the internet. Google’s
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`publisher ad server —“DoubleClick for Publishers” (“DFP”) — controls more than 90% of the
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`market for publisher ad serving. Its exchange — “DoubleClick Ad Exchange” (“AdX”) —
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`controls more than 50% of the exchange market. Finally, Google offers two DSPs — “Google
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`Ads” and “Display & Video 360” (“DV360”) — that control more than 70% of the DSP market.
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`35.
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`For years, like scores of other publishers, Daily Mail has used DFP as its
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`publisher ad server and AdX as its primary exchange.
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`36.
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`Google acquired rather than built its ad-tech dominance. Google purchased its
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`leading ad server and exchange when it acquired DoubleClick in early 2008. Google acquired
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`the forerunner to DV360 in 2010. And Google has acquired several other ad-tech services over
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`the years — including the leading ad serving technology for mobile apps (AdMob) and the
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`forerunner for Google’s data management platform (Google Analytics, previously Adometry).
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`37. With control over each ad-tech product market, Google exacts fees from
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`publishers and advertisers alike — for the sale of each impression. By default, Google charges
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`publishers a fee to serve the impression and then a second fee (for AdX, typically 20% of the
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`sale price) to manage the auction in its exchange. On the advertiser side, Google charges a fee
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`for its DSP service and then other fees for data analytics.
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`C.
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`38.
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`Google’s Manipulation of Real-Time Bidding
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`Because publishers sell high volumes of impressions in milliseconds, it is
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`infeasible to hold multi-round auctions, where bidders can respond to each other’s bids until the
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`highest bid prevails. Rather, a publisher has only one chance to accept and assess bids.
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`39.
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`To encourage competition among advertisers, publishers solicit bids in “real time”
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`— i.e., publishers want as many advertisers as possible to bid immediately when an impression
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`becomes available. The faster the bids are submitted, the faster the publisher can load the page
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`for the reader. And, the more bids the publisher receives, the higher the price it gets for its ad
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`space. Advertisers bid higher when there are more competitors for the same inventory.
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`40.
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`Google represents that its publisher ad server, as a tool for publishers, maximizes
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`the yield for publishers’ inventory. But Google operates under a conflict of interest. With its
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`control over publisher ad serving, Google controls how publishers solicit and evaluate real-time
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`bids for their inventory. Meanwhile, by operating the dominant exchange and dominant buy-side
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`software, Google is the most powerful buyer of that inventory. The mechanics of Google’s
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`conduct have evolved over time, but the result has remained the same: Google manipulates the
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`process of real-time bidding to exclude rival exchanges, underpay for publisher inventory, and
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`ultimately reduce the quality and quantity of online news.
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`1.
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`Dynamic Allocation
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`41.
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`Shortly after acquiring DoubleClick, Google introduced “Dynamic Allocation” to
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`its ad server, DFP. Dynamic Allocation was the decision rule governing how AdX competed
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`against non-Google exchanges. First, publishers estimated an average CPM (a “static bid”) for
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`each non-Google exchange it used. Second, once an impression became available, DFP sent the
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`highest static bid as a “price floor” to Google’s exchange, AdX, and called AdX to run a real-
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`time auction and submit a bid. AdX would win the impression if its real-time bid was higher
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`(even one penny higher) than the highest static bid. Once AdX beat the highest static price, no
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`other exchange was permitted to compete for the impression. Thus, with DFP, AdX was the
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`only exchange that could bid in real time for each impression.
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`42.
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`Dynamic Allocation caused substantial financial harm to publishers, including
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`Daily Mail. Because Daily Mail could call exchanges only one at a time, it could not compare
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`offers between exchanges. That left Daily Mail to accept AdX’s bid even though, had a
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`subsequent exchange been permitted to bid, it would have offered more for the impression.
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`Further, even though AdX was bidding in real time, it was competing against only the highest
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`static bid. A static bid is just a publisher’s estimate of an exchange’s historical, average bidding
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`price, so it systematically underestimates the exchange’s willingness to pay for valuable
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`impressions. Real-time bids, meanwhile, respond to the value of the particular impression and
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`thus are higher than static bids for valuable inventory. As a result, competing against static bids
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`only, AdX could buy Daily Mail’s most valuable inventory at one penny above average prices.
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`Put another way, AdX could buy box seats at the ballpark for the price of the grandstands.
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`43.
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`How DFP operated in practice, with Dynamic Allocation, directly contradicted
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`the representations Google had made to induce publishers to use its ad server. For example,
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`Google had assured publishers, including Daily Mail, that DFP would serve their interests and
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`that Dynamic Allocation in particular would “maximize yield.” Google also told publishers,
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`including Daily Mail, that Dynamic Allocation was a “risk-free way to get the highest real-time
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`revenues for all their non-guaranteed impressions.” As Google knew and discussed internally,
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`however, Dynamic Allocation depressed publishers’ revenue. When exchanges competed head-
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`to-head, Google found, publishers’ clearing prices increased by an average of 40%. Google
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`therefore knew that its ad server, while supposedly a tool to maximize publishers’ revenue, in
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`fact operated against publishers’ (including Daily Mail’s) interests.
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`2.
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`Last Look
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`44.
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`To work around the inadequacies in Google’s ad server, publishers eventually
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`developed a solution called “client-side header bidding.” Publishers could configure an auction
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`in the reader’s browser where multiple exchanges bid on a per-impression basis in real time.
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`Because header bidding occurred before the publisher called DFP to fill the impression,
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`publishers could collect header bidding’s per-impression bids and input them in DFP to compete
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`against AdX. This was the first time that publishers could compare real-time offers from several
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`exchanges at once. In the years since, some firms have introduced “server-side” header bidding,
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`where exchanges compete in real time on a third party’s servers rather than on the browser. For
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`example, since 2018, Google has offered its own server-side option called “Open Bidding.”
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`45.
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`The results of header bidding were favorable for publishers and consumers:
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`increased competition for publisher inventory led to higher prices and more investment in online
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`content. After setting up client-side header bidding, between 2016 and 2019, Daily Mail saw a
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`124% increase in revenue from ad sales.
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`46.
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`But client-side header bidding did not restore competition for publishers’
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`inventory, because AdX still did not compete against rival exchanges in real time — i.e., it did
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`not submit its bid at the same time as its rivals. AdX instead cheated off its rivals before setting
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`its own bid. Applying Dynamic Allocation, DFP sent the winning bid from client-side header
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`bidding to AdX as a price floor. AdX then won the impression if it could outbid the winning
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`header-bidding bid by a penny. Because the header-bidding auction was conducted first, AdX’s
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`access to rivals’ inside information was called “Last Look.”
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`47.
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`Last Look caused Daily Mail significant financial harm for several years. Rather
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`than AdX submitting the highest bid available from its participating DSPs, based on the value of
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`the impression to those DSPs, AdX shaved off the top because it knew the next highest price to
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`beat. For example, if header bidding returned a $4.00 bid, Google could win the impression for
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`$4.01 rather than offer the best price (e.g., $6.00) from its DSPs. In short, Google traded on
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`inside information and bought Daily Mail’s inventory on the cheap.
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`3.
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`Unified Auction
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`48.
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`In 2019, Google claimed to give up its Last Look advantage when it changed the
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`DFP auction rules and enforced a so-called “Unified Auction.” But, as part of the Unified
`
`Auction, Google created a functionally identical advantage it now calls “Minimum Bid to Win.”
`
`49.
`
`After an auction concludes, DFP tells the “Authorized Buyers” in the Unified
`
`Auction — the DSPs participating in AdX (including Google’s DSPs: DV360 and Google Ads)
`
`and certain other exchanges — what the minimum price to win the impression would have been.
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`This is not merely the price at which the impression sold; rather, Google tells the winning bidder
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`the second highest price that was placed in the auction — i.e., the cheapest price at which the
`
`winning DSP could have won the impression. Minimum Bid to Win thus provides functionally
`
`the same information as Last Look: the next highest price to beat.
`
`50.
`
`The only difference from Last Look is that Google now knows the minimum
`
`winning price immediately after, rather than before, an auction closes. For Google Ads and
`
`DV360, this difference proves to be immaterial. DSPs buy impressions by the thousands. The
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`minimum price at which a prior auction could have cleared is an incisive predictor into the
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`minimum clearing price of the next, similar auction. Google can use the minimum clearing price
`
`from one auction to inform its bid on the next impression for the same user on the same page.
`
`51.
`
`To this day, Daily Mail continues to suffer significant financial injury on account
`
`of Minimum Bid to Win. The harm to Daily Mail’s business is even worse than Last Look.
`
`Since Google enforced the Unified Auction, Google has more than doubled its share of Daily
`
`Mail’s inventory yet pays sharply lower CPMs.
`
`52.
`
`Google’s misuse of rival bidding information is the core of its business model.
`
`Because Google controls the ad server, it can control when its exchange submits bids for
`
`impressions, and what information is has beforehand. Because Google does not compete in real
`
`time, it undermines the competitive process that publishers need to sell their inventory.
`
`II.
`
`RELEVANT MARKETS AND GOOGLE’S MARKET POWER
`
`
`
`
`
`A.
`
`Publisher Ad Servers
`
`1.
`
`Market Definition
`
`53.
`
`Publisher ad servers for display inventory in the United States form a relevant
`
`antitrust product market. Publisher ad servers are inventory management systems that publishers
`
`use to manage their online display ad inventory. Among other features, ad servers (1) collect
`
`user-identification information; (2) manage direct and indirect sales channels; (3) forecast what
`
`inventory will be available to sell; (4) allocate inventory among exchanges; (5) generate reports
`
`on ad inventory performance; and (6) load ads on the publisher’s website or mobile app.
`
`54. Most publishers use only one ad server to manage their ad inventory.
`
`“Multihoming” among multiple ad servers is impracticable. A publisher cannot feasibly use two
`
`different sets of software to sell the same inventory.
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`55.
`
`Publisher ad servers also are unique — they are not interchangeable with ad
`
`exchanges or ad networks. For example, an exchange cannot route inventory to other exchanges,
`
`nor can it load advertisements on the publisher’s webpage and provide reports regarding
`
`inventory performance across multiple source of demand. An ad network likewise cannot
`
`manage and organize multiple demand sources. For an ad-supported publisher like Daily Mail, a
`
`publisher ad server is the only tool a publisher can use to manage its inventory.
`
`56.
`
`Nor is building an ad server a substitute for licensing an ad server. Building an ad
`
`server from scratch requires scale, substantial capital, and deep access to highly sophisticated
`
`engineering sources; it is not a viable option for Daily Mail.
`
`57.
`
`The relevant geographic market is the United States. Ad servers available in other
`
`countries are not a reasonable substitute for ad servers available in the United States.
`
`
`
`2.
`
`Monopoly Power
`
`58.
`
`Google is a monopolist in the relevant publisher-ad-serving market. Google’s
`
`DFP (since rebranded as part of “Google Ad Manager”) today has a 90% market share.
`
`Google’s market share nearly has doubled since it purchased DoubleClick in 2008. Since then,
`
`several ad-serving rivals — including 24/7 Real Media, aQuantive, and ValueClick — have
`
`exited the market. There are almost no ad-serving competitors left.
`
`59.
`
`Google’s monopoly power is confirmed by direct evidence. For years, Google
`
`has degraded the quality of its ad server with severe limitations despite widespread
`
`dissatisfaction among publishers. Dynamic Allocation and Minimum Bid to Win are only two of
`
`several examples of DFP rules that depress publisher revenue.
`
`60.
`
`Google’s monopoly in publisher ad serving is protected by high barriers to entry.
`
`Switching ad servers is costly and resource intensive. Publishers like Daily Mail would need to
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`reconfigure hundreds of millions of webpages to change ad servers — and there would be a
`
`significant risk to revenue if there was any glitch during the transition process.
`
`61.
`
`Another barrier to entry is that Google has tied its ad server to AdX, which is the
`
`dominant exchange in the ad exchange market. Today, publishers cannot access AdX without
`
`using DFP. Any ad-serving competitor therefore would have to enter the ad exchange and ad
`
`serving markets simultaneously — and at sufficient scale to convince publishers to forgo AdX.
`
`Such simultaneous entry in the exchange and ad serving markets is all but impossible.
`
`
`
`
`
`B.
`
`Ad Exchanges
`
`1.
`
`Mark