Case 1:21-cv-06841-PKC Document 209 Filed 09/13/22 Page 1 of 92
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`21-md-3010 (PKC)
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` OPINION AND ORDER
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`21-cv-6841 (PKC)
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`IN RE: GOOGLE DIGITAL ADVERTISING
`ANTITRUST LITIGATION
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`THIS DOCUMENT RELATES TO:
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`STATE OF TEXAS
`By Attorney General Ken Paxton
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`STATE OF ALASKA
`By Attorney General Treg R. Taylor
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`STATE OF ARKANSAS
`By Attorney General Leslie Rutledge
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`STATE OF FLORIDA
`By Attorney General Ashley Moody
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`STATE OF IDAHO
`By Attorney General Lawrence G. Wasden
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`STATE OF INDIANA
`By Attorney General Todd Rokita
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`COMMONWEALTH OF KENTUCKY
`By Attorney General Daniel Cameron
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`STATE OF LOUISIANA
`By Attorney General Jeff Landry
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`STATE OF MISSISSIPPI
`By Attorney General Lynn Fitch
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`STATE OF MISSOURI
`By Attorney General Eric Schmitt
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`STATE OF MONTANA
`By Attorney General Austin Knudsen
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`Case 1:21-cv-06841-PKC Document 209 Filed 09/13/22 Page 2 of 92
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`STATE OF NEVADA
`By Attorney General Aaron D. Ford
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`STATE OF NORTH DAKOTA
`By Attorney General Drew H. Wrigley
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`COMMONWEALTH OF PUERTO RICO
`By Attorney General Domingo Emanuelli-
`Hernández
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`STATE OF SOUTH CAROLINA
`By Attorney General Alan Wilson
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`STATE OF SOUTH DAKOTA
`By Attorney General Jason R. Ravnsborg
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`and
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`STATE OF UTAH
`By Attorney General Sean D. Reyes,
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`Plaintiffs,
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`v.
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`GOOGLE LLC,
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`Defendant.
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`Case 1:21-cv-06841-PKC Document 209 Filed 09/13/22 Page 3 of 92
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`I. OVERVIEW OF THE BUYING AND SELLING OF DISPLAY AND IN-APP ADS. ..................... 3
`II. PRODUCT AND GEOGRAPHIC MARKETS AND MARKET POWER. ........................................ 5
`A. Publisher Ad Servers. ..................................................................................................................... 6
`B. Ad Exchanges. ................................................................................................................................ 8
`C. Ad-Buying Tools for Large Advertisers. ..................................................................................... 10
`D. Ad-Buying Tools for Small Advertisers. ..................................................................................... 11
`E.
`In-App Mediation Tools. .............................................................................................................. 12
`F.
`In-App Networks. ......................................................................................................................... 13
`III. PLEADING STANDARD FOR THE SHERMAN ACT CLAIMS. .................................................. 13
`IV. COUNT III OF THE COMPLAINT PLAUSIBLY ALLEGES A SECTION 1 TYING CLAIM. .... 16
`V. COUNT IV DOES NOT PLAUSIBLY ALLEGE A SECTION 1 CLAIM BASED ON GOOGLE’S
`AGREEMENTS WITH FACEBOOK. ............................................................................................... 20
`A. The States Have Not Plausibly Alleged an Unlawful Agreement Between Google and Facebook
`to Restrain Facebook’s Use of Header Bidding. .......................................................................... 20
`1. Header Bidding. ........................................................................................................................ 22
`2. The Complaint Does Not Plausibly Allege Collusion Between Google and Facebook to
`Thwart Header Bidding. .......................................................................................................... 24
`B. The States Have Failed to Plausibly Allege an Agreement between Google and Facebook to
`Limit Competitive Bidding for In-App Ad Inventory. ................................................................. 26
`C. The Alleged Restraint on Bidding for In-App Impressions Is Properly Scrutinized Under the
`Rule of Reason. ............................................................................................................................ 27
`D. The States Have Failed to Plausibly Allege a Restraint on Bidding for In-App Impressions under
`the Rule of Reason. ...................................................................................................................... 30
`VI. CERTAIN OF THE STATES’ ALLEGATIONS PLAUSIBLY DESCRIBE ANTICOMPETIVE
`CONDUCT AND STATE CLAIMS FOR MONOPOLIZATION AND ATTEMPTED
`MONOPOLIZATION UNDER SECTION 2. .................................................................................... 34
`A. Monopolization. ........................................................................................................................... 35
`B. Attempt to Monopolize. ............................................................................................................... 38
`C. Monopoly Broth. .......................................................................................................................... 39
`D. The Alleged Anticompetitive Conduct Supporting the Monopolization and Attempt to
`Monopolize Claims. ..................................................................................................................... 40
`1. Google’s Use of Encrypted User IDs Is Not Plausibly Alleged to be Anticompetitive Conduct.
` ................................................................................................................................................. 40
`2. The Complaint Plausibly Alleges Google’s Use of Dynamic Allocation Was Anticompetitive
`Conduct in the Ad Exchange Market. ..................................................................................... 44
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`Case 1:21-cv-06841-PKC Document 209 Filed 09/13/22 Page 4 of 92
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`3. The Complaint Plausibly Alleges that Google’s Use of Enhanced Dynamic Allocation Was
`Anticompetitive Conduct in the Ad Exchange Market. .......................................................... 48
`4. The Complaint Plausibly Alleges that Project Bernanke Was Anticompetitive in the Market
`for Ad-Buying Tools for Small Advertisers and the Bell Variation Was Anticompetitive in
`the Ad-Server and Ad-Exchange Markets. .............................................................................. 50
`5. The Complaint Plausibly Alleges that Dynamic Revenue Sharing Was Anticompetitive
`Conduct that Harmed Competition in the Ad-Exchange Market. ........................................... 55
`6. The Complaint Does Not Plausibly Allege that Reserve Price Optimization Was
`Anticompetitive Conduct. ....................................................................................................... 57
`7. The Complaint Does Not Plausibly Allege that the Challenged Aspects of Exchange Bidding
`Were Anticompetitive in Any Market. .................................................................................... 61
`8. The Complaint Plausibly Alleges that Google’s Redaction of Auction Data and Limitations on
`Publisher Line Items Was Anticompetitive Conduct in the Exchange Market and Ad Server
`Market. .................................................................................................................................... 66
`9. The Complaint Plausibly Alleges that Projects Poirot and Elmo Were Anticompetitive Actions
`in the Ad-Exchange Market and the Market for Ad-Buying Tools of Large Advertisers. ...... 68
`10. The Complaint Does Not Plausibly Allege Anticompetitive Conduct Relating to Mobile Web
`Page Development. .................................................................................................................. 70
`11. The Claim Directed to Google’s Proposed Privacy Sandbox Is Not Ripe for Adjudication. .. 72
`12. The Complaint Plausibly Alleges that Google’s Unified Pricing Policy Was Anticompetitive
`Conduct Directed to the Ad-Exchange Market and Ad-Buying Tools for Small and Large
`Publishers. ............................................................................................................................... 74
`13. The Facts Underlying the Section 1 Tying Claim Are Anticompetitive Conduct in the
`Publisher Ad Server Market in Support of the Section 2 Claims. ........................................... 77
`VII. THE COMPLAINT DOES NOT PLAUSIBLY ALLEGE THAT DYNAMIC ALLOCATION AND
`DRS HAVE CONTINUING, PRESENT ADVERSE EFFECTS, AND THIS CONDUCT CANNOT
`BE ENJOINED. .................................................................................................................................. 78
`VIII. THE COURT DECLINES TO ADJUDICATE GOOGLE’S LACHES DEFENSE AT THE
`PLEADING STAGE. ......................................................................................................................... 80
`CONCLUSION. .......................................................................................................................................... 87
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`Case 1:21-cv-06841-PKC Document 209 Filed 09/13/22 Page 5 of 92
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`CASTEL, Senior District Judge:
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`The advertising industry has kept pace with consumers’ near-universal use of
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`websites and mobile apps to obtain news and information. Publishers and advertisers can now
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`participate in a milliseconds-long auction to sell an ad directed to a specific web user based on
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`browsing history and characteristics. Pricing varies based on the consumer’s perceived value to
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`the particular advertiser: a seller of motorcycles or sunglasses is generally willing to pay more
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`for ads targeted to likely purchasers. This antitrust action focuses on the multiple roles played by
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`Google LLC (“Google”) in the purchase and sale of display ads on commercial websites and ad
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`impressions on mobile apps.
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`The Attorneys General of ten states brought an action in the Eastern District of
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`Texas against Google, alleging that Google’s digital advertising practices violate sections 1 and 2
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`of the Sherman Act, as well as the laws of their states. The action was transferred to this Court
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`by the Judicial Panel on Multi-District Litigation for coordinated pre-trial proceedings. Since
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`then, a 702-paragraph Third Amended Complaint (“the Complaint”) has been filed in this
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`District on behalf of sixteen states and the Commonwealth of Puerto Rico (collectively, the
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`“States”).
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`The States describe the Complaint as cataloguing a “sweeping variety of
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`anticompetitive conduct.” (Mem. in Opp. at 1.)1 They allege that Google has monopolized or
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`attempted to monopolize various markets related to online display ads (Counts I and II) and
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`unlawfully used its market power to tie the sale of Google’s “ad server,” a tool used by
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`publishers to manage their inventory of display ads, to Google’s “ad exchange,” a distinct
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`1 The operative pleading also alleges violations of various state statutes. At a pretrial conference of September 21,
`2021, this Court stayed the filing of any motions directed to the several state law claims of the Attorneys General,
`thereby permitting the parties and the Court to focus on the federal antitrust claims. See Pre-Trial Order No. 1 ¶ 11
`(Aug 13, 2021; Docket # 4).
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`product that conducts auctions for the sale of display ads (Count III).2 They also allege that
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`Google entered into an unlawful restraint of trade with non-parties Facebook, Inc. and Facebook
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`Ireland Limited (“Facebook”) (Count IV).
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`The States seek only injunctive relief for the claimed Sherman Act violations and
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`bring this action as parens patriae on behalf of their citizens. The Complaint alleges some
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`anticompetitive conduct undertaken by Google in the past that it has since abandoned. Such
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`conduct may be relevant to Google’s motive and intent, but marketplace conduct that is no
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`longer practiced generally may not be the subject of injunctive relief unless it has a continuing,
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`present adverse effect.3
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`Google moves to dismiss the federal antitrust claims for failure to state a claim for
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`relief. Rule 12(b)(6), Fed. R. Civ. P. Google need not feature all of its defenses in its motion,
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`and its motion accepts the Complaint’s product and geographic market definitions, and, with
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`limited exceptions, its allegations of monopoly power or market power. The motion focuses
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`instead on Google’s assertion that its marketplace conduct has been lawful and innovative and
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`has provided consumers with meaningful choices.
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`On a motion to dismiss, the Court accepts the non-conclusory allegations of the
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`Complaint as true and determines whether they plausibly state claims for relief. As will be seen,
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`the Supreme Court has emphasized the importance of this gatekeeping role in the antitrust arena.
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`The Court must exercise this role even though a motion to dismiss neither allows for a factual
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`narrative that supplements the four corners of the pleading nor a counter-narrative by the
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`2 The action does not relate to other forms of advertising on the internet, including targeted text-based ads sold by
`search engines, video ads that run before or during video content or sharable ads on social media platforms.
`3See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130 (1969) (plaintiff must “demonstrate a
`significant threat of injury from an impending violation of the antitrust laws or from a contemporary violation likely
`to continue or recur.”). Google separately asserts that by reason of unreasonable delay and prejudice, certain claims
`are barred by laches.
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`defendant. Consideration of actual evidence must await the completion of discovery and a
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`motion for summary judgment or trial. Experience teaches that cases often look very different
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`when evidence from both sides is considered.
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`On this motion, the Court principally concludes that:
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`• The States have plausibly alleged that Google has used its market power in the
`ad-exchange market to coerce publishers to license its publisher ad server and
`thus stated a claim for an unlawful tying arrangement in violation of section 2
`(Count III).
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`• The States have not plausibly alleged Google’s Network Bidding Agreement
`with Facebook amounts to an unlawful restraint of trade in violation of section
`1 (Count IV).
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`• The States have plausibly alleged a monopolization claim under section 2 in
`the nationwide markets for (1) publisher ad servers, (2) ad exchanges and (3)
`ad-buying tools for small advertisers (Count I).
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`• The States have plausibly alleged an attempt-to-monopolize claim under
`section 2 in the nationwide market for ad buying tools for large advertisers
`and an alternative claim for attempt to monopolize the markets for ad
`exchanges and ad-buying tools for small advertisers (Count II).
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`• Google has challenged the timeliness of many of the State’s assertions of
`anticompetitive conduct under the doctrine of laches. The Court concludes
`that the consideration of this affirmative defense must await the development
`of a factual record.
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`Thus, the motion to dismiss will be granted as to Count IV and otherwise denied.
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`I. OVERVIEW OF THE BUYING AND SELLING OF DISPLAY AND IN-APP ADS.
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`An online content publisher, such as a news website, sells advertising space
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`through ad exchanges. These ad exchanges run automated auctions of ad impressions, in which
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`competing advertisers submit bids based on the characteristics of the person who will view the
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`ad. The auction occurs in a fraction of a second, taking place as the user’s webpage loads and
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`displays the ad of the successful bidder. The Google ad exchange, called AdX, processes
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`approximately eleven billion display ads each day. (Compl’t ¶ 5.) In addition to operating an ad
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`exchange, Google also offers a tool for managing a publisher’s sale of online display ads and
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`tools for advertisers to purchase display-ad space. Google also offers products and services to
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`developers of mobile-device apps, which seek to sell ad impressions, and to the in-app networks
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`that purchase those impressions.
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`The Court begins with an overview of how publishers and app developers sell
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`their advertising inventory. Much of the terminology and jargon will be important to an
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`understanding of the States’ antitrust claims. For ease of reference, boldface text will be used
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`when a new term is introduced.
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`Large publishers sell display ads directly to advertisers, but they also sell them
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`indirectly through ad exchanges, which conduct automated auctions of publisher inventory.
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`Large publishers manage their inventory of display ads – also known as impressions – through a
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`type of software known as an ad server. The ad server interfaces on behalf of the publisher with
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`an ad exchange. Advertisers use an ad-buying tool to bid on display ads. The ad-buying tool
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`used by large, sophisticated advertisers has distinct features from those used by small advertisers.
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`Ad-buying tools interface with ad exchanges on behalf of advertisers.
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`The Complaint neatly summarizes how these components interact to conduct an
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`auction on an ad exchange:
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`When a user [i.e. consumer] visits a publisher’s website, the
`publisher’s ad server sends a “bid request” to the ad buying tools
`who have a “seat” to bid in the exchange and purchase on behalf of
`their advertiser clients. This bid request announces the publisher’s
`available impressions to exchanges, along with information about
`the impression, including the user’s ID, the ad slot’s parameters, and
`any rules about pricing. These bid requests also contain information
`about the impression at issue and convey a “timeout,” which is the
`amount of time prospective buyers are allotted to respond with their
`“bid response.” Within this timeframe, which is typically a mere
`fraction of a second, each ad buying tool must unpack the
`information contained in the bid request, gather and deploy personal
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`information about the user, determine the appropriate price to bid on
`behalf of the prospective advertiser, and return a bid response to the
`exchange. When time expires, each exchange closes its auction,
`excludes any late bids, and passes its highest bid to the ad server.
`The publisher’s ad server then selects which ad to display and
`effectuates the display of the ad to the user.
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`The marketplace for the sale of ads by developers of apps used in mobile devices
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`(Id. ¶ 74.)
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`such as smartphones and tablets is somewhat different. Developers use an in-app mediation
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`tool that (1) manages the developer’s inventory of impressions; (2) includes a software
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`development kit installed on a user’s device that enables the developer to obtain information
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`about the user; and (3) serves as the vehicle for conducting auctions. Advertisers do not
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`typically interact directly with the in-app mediation tool. Instead, in-app networks buy
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`impressions in a manner akin to a wholesaler and then resell them at a mark-up to advertisers.
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`In the marketplace for display ads, Google offers ad servers for publishers and ad-
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`buying tools for large and small advertisers. It also operates an ad exchange. In the in-app
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`impression marketplace, Google offers an in-app mediation tool for developers and operates an
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`in-app network for advertisers.
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`II. PRODUCT AND GEOGRAPHIC MARKETS AND MARKET POWER.
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`The States allege that Google has market power in six distinct product markets,
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`each of which is alleged to be nationwide in geographic scope.4 For the purposes of the motion,
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`Google has not challenged the existence of these product and geographic markets, the States’
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`definitions of the markets or the allegations of monopoly or other market power, except in a
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`4 The Court recognize that Google’s activities – e.g., licensing of software, conduct of auctions, furnishing of
`technical support – are services rather than products, but will use the terminology “product” market in conformity
`with the parties’ usage and the practice utilized in most case law.
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`footnote that challenges the existence of monopoly power in the ad-exchange market. (Google
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`Mem. at 30 n.9.)
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`A. Publisher Ad Servers.
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`To manage their inventory of display ads, publishers license a software product
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`called an ad server. The ad server is used for both direct and indirect sales of display ads.
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`“Publishers typically use a single ad server to manage all of their web display inventory; using
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`multiple ad servers would substantially frustrate a publisher’s ability to effectively optimize
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`management of their inventory and maximize revenue.” (Compl’t ¶ 49.) An ad server allocates
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`and routes available display ad space between direct sales per pre-arranged agreements with
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`advertisers and indirect sales conducted through exchanges. The ad server directly connects to
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`the ad exchange. (Id. ¶¶ 52-53.)
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`Ad servers also assign a unique ID to each user, which identifies users by various
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`characteristics and is intended to match ads to their target viewers. As described by the States:
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`[W]hen a user visits a webpage, the ad server – on behalf of and with
`the permission of the publisher – identifies the user through
`identification technology facilitated by the user’s web browser (e.g.,
`Chrome or Safari) and/or mobile device (e.g., Android or iOS). To
`keep track of individual users, the ad server assigns each user
`a unique user ID (e.g., 5g77yuu3bjNH). By essentially ‘tagging’
`users with a unique user ID, an ad server helps publishers, ad
`exchanges, and advertisers identify and track various characteristics
`and behaviors of each particular user who accesses the publisher’s
`content. For example, an advertiser can correlate a user’s
`pseudonymous ID (e.g., 5g77yuu3bjNH) with the user’s identity
`(e.g., John Connor) and use that identity ‘link’ to look up additional
`information about the user (e.g., John Connor lives in Los Angeles,
`drives Harley-Davidson motorcycles,
`and wears Oakley
`sunglasses). This, in turn, allows a prospective ad purchaser (an
`advertiser or network) to place a value on the ad space each
`individual user will see.
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`(Id. ¶ 51.)
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`The States allege that ad servers for large publishers are a relevant product market
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`and that Google has willfully acquired monopoly power in that market. (Id. ¶¶ 93, 528.) Large
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`publishers have unique characteristics and customers, and ad servers are used by these publishers
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`to manage a large volume of ad sales made through direct and the indirect sales channels. (Id.
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`¶ 94.)5 The States allege that for large publishers, there are no reasonable substitutes for ad
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`servers, and that there are high barriers to entry for competing ad servers due to the high
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`“switching costs” (risk and intensive use of internal resources) that publishers would encounter.
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`(Id. ¶¶ 98, 126.)
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`Google entered the ad server market in 2008 through its acquisition of
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`DoubleClick. (Id. ¶ 245.) According to the States, “[w]hen Google urged the FTC to clear its
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`acquisition of DoubleClick, it argued that several competing ad servers constrained its ability to
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`increase price or decrease quality; these included WPP’s 24/7 Real Media ad server, Microsoft’s
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`Atlas/aQuantive ad server, and ValueClick’s ad server. All of those competitors have since
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`exited the market.” (Id. ¶ 122.)
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`At the time of the acquisition, DoubleClick’s share of the ad-server market was
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`between 48-57%. (Id. ¶ 245.) By 2010, Google’s share of the ad-server market had grown to
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`78%, by 2012 to 85%, and by 2015 to 90%. (Id. ¶ 114.) The States allege that Google internal
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`documents show that by Q2 of 2018, Google’s market share of large publishers had reached 99%
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`5 According to the Complaint, “most” small publishers do not need an ad server. (Id. ¶ 97.) The Complaint does not
`demarcate small publishers from large ones. Small publishers often sell their ad inventory to a “web display ad
`network” or “ad network” which, in turn, sells that inventory to advertisers. (Id. ¶ 65.) Networks are middlemen
`holding inventory risk. (Id. ¶ 66.) Sales are not conducted through real-time auctions but are direct sales by the
`network to small advertisers. Google describes its ad network, known as the Google Display Network or GDN, as
`“the largest ad network in the world.” (Id. ¶ 69.) Google’s margin on network sales is typically 32-40% of each
`transaction. (Id.)
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`in the United States. (Id.) Google’s ad server for publishers has been known at various times as
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`DoubleClick for Publishers or DFP, and Google Ad Manager or GAM. (Id. at ¶¶ 97, 100.)
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`B. Ad Exchanges.
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`Ad exchanges are “real-time auction marketplaces that match multiple buyers and
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`multiple sellers on an impression-by-impression basis.” (Compl’t ¶ 58.) Ad exchanges are
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`typically used by large publishers and have minimum-impression requirements. (Id. ¶ 59.) Ad
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`exchanges do not hold an inventory of display ads but act as a go-between, and charge publishers
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`a “take-rate” or exchange fee as a commission on the clearing price of the transaction. (Id. ¶ 60.)
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`An ad exchange auctions a publisher’s inventory, as routed through an ad server, and advertisers
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`submit bids through an ad-buying tool. (Id. ¶ 58.)
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`The States allege that ad exchanges comprise a relevant product market and that
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`Google has maintained or acquired monopoly power in the market for ad exchanges. (Id. ¶¶ 128,
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`528.) The ad-exchange market is the subject of the States’ monopolization and attempted
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`monopolization claims. (Id. ¶ 528, 532.) Ad exchanges have unique customers, features,
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`pricing, and entry and usage requirements, and there are no reasonable product substitutes. (Id.
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`¶¶ 129, 131.) Exchanges facilitate real-time auctions and, as noted, do not bear inventory risk.
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`(Id. ¶ 129.)
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`Google’s ad exchange is known as AdX. (Id. ¶ 5.) “By 2015, Google’s internal
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`documents demonstrate that 80 percent of the publishers using Google’s ad server also
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`contracted with Google’s exchange. Since 90 percent of publishers were using Google’s ad
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`server, this means that the large majority of available publisher customers were using Google’s
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`exchange . . . .” (Id. at ¶ 150.) In the four quarters preceding October 2019, AdX allegedly
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`“transacted over 60 percent of all display inventory sold through exchanges in the United
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`States.” (Id. ¶ 151.)
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`The States acknowledge that three major exchanges compete with AdX: Rubicon,
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`Xandr, and Index Exchange. (Id. ¶ 153.) While $7.6 billion in gross revenues was transacted on
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`AdX in 2018, the next-largest exchange (Xandr) transacted $2 billion in gross revenues and all
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`competitor exchanges transacted $6 billion combined. (Id.)6 The Complaint also alleges that
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`AdX transacts impressions targeted to high-value users that advertisers cannot purchase in rival
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`exchanges. (Id. ¶ 154.) The Complaint alleges that Google has monopoly power in the ad-
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`exchange market that is shown not by market share alone but also by its ability to charge
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`supracompetitive prices, with an average take rate of 20% of a transaction’s value. (Id. ¶ 156.)
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`According to the States, this is double or quadruple the rate charged by AdX’s nearest
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`competitors. (Id. ¶ 61.)
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`The States allege that Google’s DFP ad server preferentially routes publisher
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`inventory to AdX and that “Google operates the largest ad exchange in the market and maintains
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`its monopoly position in ad serving, creating inherent conflicts of interest between publishers’
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`best interests and its own. Google imposes one fee for its ad server to manage publishers’
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`inventory and then takes another (substantially higher) fee when that inventory trades through
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`AdX.” (Id. ¶ 64.)
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`In a footnote to its memorandum in support of the motion to dismiss, Google
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`urges that the States have failed to allege that Google possessed monopoly power in the ad-
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`exchange market, implying the existence of a bright-line rule that “market shares below 65
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`6 According to the Complaint, “[t]he exchange market is also characterized by market exit and lack of recent entry.
`Microsoft (AdECN) exited the exchange market in 2011, Yahoo! (RMX) in 2015, and Facebook (FBX) in 2016.”
`(Id. ¶ 159.) A new entrant would have to achieve sufficient scale among both publishers and advertisers to be
`viable. (Id. ¶ 160.)
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`percent cannot support a Section 2 claim.” (Google Mem. at 30 n.6.) In this Circuit, there is no
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`bright-line rule. See PepsiCo, Inc. v Coca-Cola Co., 315 F.3d 101, 109 (2d Cir. 2002) (“Absent
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`additional evidence, such as an ability to control prices or exclude competition, a 64 percent
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`market share is insufficient to infer monopoly power.”) (emphasis added); Tops Markets, Inc. v.
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`Quality Markets, Inc., 142 F.3d 90, 99 (2d Cir. 1998) (depending on other market factors, “a
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`share between 50% and 70% can occasionally show monopoly power. . . .”) (quotation marks
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`omitted); Broadway Delivery Corp. v. United Parcel Serv. of Am., Inc., 651 F.2d 122, 130 (2d
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`Cir. 1981) (error to instruct a jury that monopoly power could not be found if the market share
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`was less than 50%).
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`At the pleading stage, Google’s market share and other relevant market
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`characteristics outlined above permit a plausible inference of monopoly power in the ad-
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`exchange market.
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`C. Ad-Buying Tools for Large Advertisers.
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`Large advertisers require ad-buying tools to implement their buying programs.
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`The tools allow large advertisers to achieve advertising “campaign objectives, including
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`purchasing the best quality inventory on exchanges for the lowest prices.” (Compl’t ¶ 196.)
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`“Ad buying tools let advertisers set various parameters integral to their automated purchasing
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`decisions, including crucial details about the types of users they want to target and the maximum
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`bids they are willing to submit for various types of display ad inventory.” (Id. ¶ 72.) Ad-buying
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`tools connect to an ad exchange, which, in turn, is connected to publishers’ ad servers, such as
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`Google’s DFP. Large advertisers may use an ad-buying tool across multiple exchanges and
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`networks. (Id. ¶ 71.) An ad-buying tool for large advertisers is sometimes referred to as
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`10
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`Case 1:21-cv-06841-PKC Document 209 Filed 09/13/22 Page 15 of 92
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`demand side platform or DSP. Google’s DSP is called DV360, and is described as the
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`“largest” ad-buying tool for large advertisers. (Id. ¶ 76.)
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`The Complaint alleges that DSPs used by large advertisers are a relevant product
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`market for antitrust purposes and that Google has attempted to monopolize that market. (Id. ¶¶
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`196, 532, 533.) It asserts that there are no suitable substitutes. (Id. ¶¶ 197-209.) The States cite
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`GEICO, McDonalds and Ford as examples of large advertisers. (Id. ¶¶ 196, 198.) The monthly
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`spend rates for ad-buying tools are very high, with Google’s DV360 requiring at least a $10
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`million spend per year, Media Math requiring $2.4 million and The Trade Desk at least $1
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`million. (Id. ¶ 199.) Amazon’s DSP requires a monthly commitment of $35,000. (Id. ¶ 73.)
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`The Complaint does not allege Google’s market share in ad-buying tools for large
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`advertisers, other than to say that DV360 “is the largest ad buying tool for large advertisers.”
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`(Id. ¶ 76.) The monopolization claim in Count I is not directed to Google’s conduct in the DSP
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`market, though the attempted monopolization claim in Count II asserts that “Google has
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`monopoly power, or in the alternative, a dangerous probability of acquiring monopoly power, in
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`the market . . . for ad buying tools for large . . . advertisers.” (Id. ¶ 532.) Certain other
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`allegations suggest that DV360 has tailored its activities based on the risk that its customers
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`would shift business to rival