Day 10: Parsing and Parrying

The parties get a chance to rebut the testimony of their opponents' witnesses-- subject to certain rules of engagement. And this author's assumptions about the DOJ's assumptions are challenged.

Friday was day ten of the Google ad tech remedy trial, and it felt like Friday; everyone was antsy to get this over with. It was also a short day, with this trial running into other commitments for Judge Brinkema, presumably scheduled because the trial might or might not have been finished by today. Short as it was—we started an hour and a half late and lunch went a half hour over—the day felt long for us spectators, because not much new appeared in the testimony. Aside from one telling moment late in the day, the two sides seemed like two sports teams playing for a draw, less concerned with winning than with avoiding injury before the next round.

I take the two sides’ caution as an indication that nobody is confident in predicting how Judge Brinkema will rule, especially on the central questions of this trial: will the court force Google to divest itself of its ad exchange, AdX, and to make the decision logic of its ad server, DFP, open source? Uncertainty also indicates the high regard for Judge Brinkema: she is not intimidated by big business lining up to say government should stick to minding the lowly while we high and mighty forge the future of the human race; she is also not swayed by activist moralizing about evil corporations. And she is well on top of the merits of this case. The merits, though, offer very good reasons the judgment could go either way.

I will use this slow day, with its minimal new substance, to tell you about some of the dynamics I observe, as well as the courtroom setting. Interesting dynamics were visible in the testimony of the day’s first witness, Stephanie Layser. Layser is currently with Amazon Web Services (AWS) and, more importantly, was formerly VP of Advertising Technology and Operations at News Corp. At News Corp, Layser was among the creators of header bidding (described on day one), which was sort of the insurrection of all the mid-sized players in advertising technology against the Google giant. Layser’s work with AWS is less hands-on than her former position was, and Google used that fact to argue—unsuccessfully—that her knowledge of the markets is obsolete and her testimony should be excluded (Google’s motion was denied first thing on day nine).

Layser was testifying as the DOJ’s first rebuttal witness. There are rules about relevance that govern the scope of rebuttal; all testimony must address some specific point or claim made by an earlier witness for the other side. This creates openings for objections about the specificity of the rebuttal witness’s testimony, and the lawyer for Google took full advantage. As the website US v Google put it in their coverage of day ten, “The objection-fest begins immediately, as DOJ begins their direct examination... Judge Brinkema sustains a couple of objections before seemingly realizing that Google simply does not want her to be heard.” I could not see Judge Brinkema at that particular moment, so let me digress to tell you a little about the physical setup.

Across the wide corridor from Judge Brinkema’s courtroom is another courtroom, a mirror image that is used, in big trials like this one, as an overflow room. This was especially needed on day one, when many people came for opening statements. On that day, the press was set up in front of the courthouse with a half dozen cameras filming everyone as they arrived. Inside the courthouse, no filming is allowed. In fact, no electronics are allowed. Laptops or bigger cannot be brought into the building at all, and phones and smart watches must be turned off and placed in locking pouches that only security can unlock as you leave. I was early on day one to get a coveted seat in the courtroom, of which there are not many because most of the courtroom gallery seating is reserved for participants. I told you about the jury box reserved for the 17 states’ attorneys general. The front two thirds of the gallery seating is also reserved: for DOJ lawyers and staff, Google lawyers and staff, and credentialed (unlike yours truly) press. So, many people were across the corridor on day one.

The crowd has fluctuated on other days, as people come to hear particular witnesses, but the overflow room stays in use. It has a large, closed-circuit TV screen set up in front of the gallery, which shows the courtroom from an upper front corner behind the judge (and shows documents and diagrams when they are displayed on the courtroom’s screens). I discovered in the second week that the overflow room has certain advantages: one can sit near the screen and read the exhibits better, the sound is a bit better, the camera shows the lawyers from the front (where you only see the backs of their heads in the courtroom), and there is a stress-relieving relaxation of the court’s formality (a little, anyway) in the overflow room. The big downside is that you cannot see the judge.

One of the witnesses that Layser was rebutting was Elizabeth Douglas of wikiHow. The particular point of contention concerned Google’s excessive “take rate” in AdX, and more generally Google’s high profits off the ad tech markets. DOJ’s David Geiger quoted Douglas’s “bigger, existential concern” (which you’ll recall from day eight), asking Layser (without naming Douglas) what she thought of the statement that “without Google to shepherd display advertising, monetization could stop and the internet could fall away.” Google’s Justina Sessions leaps up to object, and Judge Brinkema agrees that the statement is “hyperbolic.” Geiger then explains that he is quoting Douglas, and Judge Brinkema reverses herself and allows Layser to answer.

The dynamics of questioning can be both interesting and frustrating, which Layser’s testimony illustrates. The lawyers try to get certain statements into the record and before the court in exactly the form they want them. This is especially clear in cross-examination. The lawyer wants the witness to say “Yes” or “No” to a statement phrased with just the spin the lawyer wants it to have. But witnesses don’t want to endorse statements they perceive as misleadingly spun. So they try to revise and correct the question. The lawyer responds, “Yes, but that’s not what I asked.” This may go back and forth until the judge instructs the witness to answer yes or no, and to let the other side clarify on redirect. This is how both sides can get their spin into the record. The judge is sympathetic to this structure as the best way to get full information before the court, and doesn’t hesitate to require witnesses to answer the questions as asked. Layser’s rebuttal to Douglas’s testimony is a good example.

Part of Douglas’s testimony for Google had concerned what she paid Google for its services (with which she was very happy). DOJ, on cross-examination, had tried to get her to acknowledge that Google’s take rate was 20 percent, meaning GAM (AdX integrated with DFP is now Google Ad Manager) takes 20 percent of what the advertiser pays to put an ad on the wikiHow website. This is much higher than the 5 to 10 percent that other ad exchanges charge, and has been central to this court case all along as proof of Google’s monopoly power. Douglas insisted she didn’t know or care about prices at that single ad impression level and looked only at the revenue stream she gets from selling the ad space. (Side note: I believe the implication here is that the publisher, wikiHow, can simply pass along GAM’s high take rate to the advertisers by raising the “floor,” or minimal acceptable bid; or rather, wikiHow’s ad server, GAM, will raise the floor for her and, since this will occur across the market, wikiHow will not lose business as prices for everyone will go up to cover Google’s monopoly profits.) So, Douglas saw no reason to complain about Google’s prices.

Let’s fold into this a recurring complication: GAM provides its publisher ad services free to small publishers. Google has made as much PR hay out of this as possible, saying 90 percent of publishers get free service. The DOJ points out the flip side, which is that small publishers are small and only add up to ten percent of the market, so 90 percent of ad impressions are actually paid for. Geiger is asking Layser about all this, including whether a new buyer of AdX could raise fees (above free, for some), and Sessions is objecting at every opportunity, arguing that Douglas has not testified on various specific points and so Layser’s testimony is not within the bounds of “rebuttal.” Layser is not helping because she won’t answer the question as asked, refusing to accept that “free” services are really free, and explaining that publishers pay for “free” service by giving Google their data, and that “free” ad impression fees are trivial compared to the high take rate for exchange services, which even small publishers have to pay. Considerable rephrasing and coaching ensues. I couldn’t read the judge’s face, being in the overflow room during this part, but eventually Layser settled down to help DOJ rebut key points as a savvy veteran of the anti-Google trench warfare.

Following Layser’s rebuttal testimony for DOJ, Jason Nieh, the computer scientist, continued his expert testimony for Google. A great deal of it was claiming that DOJ’s expert witness Jon Wessman had not done nearly enough work to really grasp the enormity of the technical difficulty of divesting AdX (or DFP). It was not very effective. Nieh would point to a Weissman simplified diagram outlining some process and complain that it was too simple. Then he would put up a more complicated diagram of the same process that was still a simplification. The purpose was to show that there were many dependencies, parts of the system that would not be migrated with a divestiture and so would need to be replaced or recreated. On cross-examination, Nieh’s strategy backfired, leading to another important question from Judge Brinkema, that telling moment I mentioned.

The first thing DOJ did in cross-examination was refute... me. Well, not me personally, but Nieh’s claim—which I endorsed in my day nine criticism of the demand to protect asset value—that DOJ did not share his starting assumptions. David Teslicko for DOJ cited testimony from both Weissman and Bjedov that the divestitures DOJ was proposing would retain full functionality (assumption one) and not create service interruptions (assumption two). In my defense, there is a difference between an aspiration and a requirement, and DOJ is not required to meet the goals Nieh assumed. Google, though, has striven throughout this remedy trial to insert a presumption that the court must adopt a shareholder-value-is-next-to-godliness view of the world. Teslicko made this tactic explicit. He got Nieh to acknowledge that Google’s lawyers had asked him to base his analysis on those first two assumptions, and then to acknowledge a tacit third assumption: that Google would not be forced to sell any of its proprietary infrastructure.

Nieh’s diagrams of AdX structure were under seal as containing proprietary Google information. So, the versions put up on the public display screens were just flow charts of boxes with no labels on them. The participants could see what all the boxes were. Everybody could see that certain boxes were outlined in red, which is how Nieh designated the computer subroutines that were part of Google’s proprietary source code and—by Google’s assumption—therefore could not be divested and would need replacements. Judge Brinkema asked Nieh point-blank: “If all these red boxes go with the divestiture, would that make a difference?” Nieh had to reply that if all the dependencies were not problems, then yes, a migration would be easier. One can imagine the alarm coursing through the ranks of Google’s lawyers at this reminder that the court has no obligation to leave Google’s proprietary information untouched. The court can do what it wants to pry open competition.

DOJ will present one more rebuttal witness on Monday morning, and may recall its experts to rebut Google’s experts. But Judge Brinkema has warned that she wants this trial completed by lunchtime on Monday. We are coming to the end.