Have we heard all this before?

Day 25-26: Testimony on familiar issues continues to dominate as the States wrap up their case

Jeff Hurst’s testimony in Week 6 of the Google antitrust trial highlighted the challenges Vrbo faced in maintaining the return on investment it received from its advertising spending with Google. (Photo by Smith Collection/Gado/Getty Images).

We’re now in the seventh week of the Google antitrust trial — and it feels as if we are well beyond the point in which most of the testimony is providing us with material new information.

The testimony we heard today was a prime example of that. In the morning we heard testimony from Jason Krueger, a product manager at Google who worked on Google’s Search Ads 360 platform from 2011 until 2022; in the afternoon, we heard from Professor Wilfred Almadoss, an expert witness for the States who specializes in digital marketing.

This wasn’t the first Krueger who had been called to the stand. Jason’s brother and colleague at Google Ryan Krueger testified a few weeks ago — and as another court-watcher observed, there was a lot of overlapping testimony from the brothers. Jason Krueger’s testimony this morning largely provided just another perspective on a key question in the States’ case against Google: why has it taken so long for important features on SA360 like auction-time bidding to be supported for Microsoft Ads?

As an expert witness, Professor Almadoss’s testimony also didn’t add many new facts to the equation. Like the other expert witnesses we have seen, Almadoss’s testimony was presented with the aid of a slide deck presentation he prepared. In this presentation, Almadoss provided high-level conclusions before explaining how he reached these conclusions and offering support for them from previous testimony and exhibits in the trial.

This dynamic might change soon as the government plaintiffs conclude their cases and turn things over for Google’s defense — but even once we get to Google’s witnesses, I expect that the testimony will continue to revolve around the same themes and issues that we’ve already heard extensive cross-examination from Google on.

The main reason I mention all of this is just to give you a sense of what the actual day-to-day experience of watching this trial has been — things get repetitive and duplicative. (This is also a large reason why I haven’t been writing quite as many articles the last couple of weeks — it just feels like there’s less to write about.) That’s not to say this testimony isn’t important and won’t be helpful to Judge Mehta. When Judge Mehta actually starts to write his opinion, I imagine he’ll organize all of the evidence he has seen thematically, so the actual chronology of the witnesses will be less important.

With all that said, here are a few notes on things I found interesting from the testimony today and last Thursday when we heard from Jeff Hurst (a former Expedia Group/Vrbo executive) and Paul Vallez (the executive vice president for strategic business development and partnerships at Skai).

• As we have seen before, the States’ direct examination of Jason Krueger highlighted the importance of auction-time bidding. But the questioning also zoomed in on Floodlight, which is Google’s conversion data tracking system that allows advertisers to evaluate the effectiveness of their advertisements. According to Krueger, advertisers could achieve the “exact same outcome” with Microsoft Ads — but as Judge Mehta’s questioning highlighted, achieving that outcome requires advertisers to take additional steps to import their data from Microsoft into SA360.

  • Those additional steps mirror the issue that is really at the core of the default search engine agreements as well. Users can switch their search engine default if they take additional steps just as advertisers can obtain full conversion data from Microsoft Ads — but according to the government plaintiffs, those additional steps pose meaningful barriers that thwart competition.

• Professor Almadoss presented three high-level opinions. I wasn’t able to write down the third opinion quickly enough, but here were his first two opinions: 1) General search ads serve a distinct purpose for advertisers because they help them reach consumers with a high probability of purchase; 2) Google has reduced the visibility of certain Specialized Vertical Provider (SVP) advertisers on the Search Engine Results Page (SERP). This conduct has increased the costs of maintaining the prominence on the SERP for those SVPs.

• Throughout the trial, Google has argued that advertisers continue to spend their advertiser budgets with Google because Google is able to offer a strong return on investment. That might be true — but the testimony of former Vrbo President Jeff Hurst complicated that picture. During his testimony on Thursday, Hurst detailed the uphill battle Vrbo faced in obtaining prominent placements on Google’s search engine results page as Google built out its “meta-product” for travel bookings that ended up cannibalizing much of the traffic Vrbo had previously received for free. As a result of this and other changes, Hurst testified that from 2015 to 2019, Vrbo had to increase its spending on Google ad placements from $21 million to roughly $290 million just to maintain the same amount of visitors to its site through Google. According to Hurst, Vrbo had no other option. “Growing without Google from where we start — I don’t think it’s mathematically possible,” he said.

• During Google’s cross-examinations of the States’ witnesses, we’ve seen Google offer a couple of different innocuous reasons for the delayed implementation of auction-time bidding for Microsoft Ads on SA360: 1) developing the technology for auction-time bidding requires significant time and resources; and 2) there has been limited demand from advertisers for the roll-out of such a feature. The States have worked to undermine these claims with internal documents and communications from Google employees, but the States’ most compelling challenge to the claims likely came from Thursday’s testimony of an employee for a competing search engine management tool.

  • Paul Vallez, a business development executive for Skai, explained that Skai’s small size compared to SA360 means it has to carefully choose what features to invest its resources in because it is not able to offer all of the resources offered by SA360. Despite those limitations, Vallez testified that Skai launched auction-time bidding for Microsoft Ads in 2020. Skai’s ability to implement auction-time bidding for Microsoft Ads raises questions about Google’s explanations for the delayed implementation of the same feature in SA360. Vallez testified that Skai is only one-tenth the size of SA360 — so if Skai was able to develop auction-time bidding for Microsoft Ads all the way back in 2020, why has SA360 still not been able to?

Looking back on the first six weeks

Now that we’ve passed the halfway point of the trial and the DOJ has concluded its case, several outlets have published recaps of the biggest takeaways/moments from the action in court so far. Here are a few of the different articles I’ve seen:

Bloomberg: DOJ Google Antitrust Case Wraps With Apple Deal on Center Stage

Reuters: Five things to know about the Google antitrust trial as it hits halfway mark

Wall Street Journal: Google Antitrust Trial: Five Key Moments as Government Concludes Its Case

American Economic Liberties Project: DOJ Concludes a Compelling Case in the Landmark US v. Google Antitrust Trial with Final Witness

Chamber of Progress: Seven Takeaways from the Justice Department’s Antitrust Case Against Google’s Search Deals

If you’re interested in really doing a deep dive on any portions of the previous testimony, The Capital Forum recently began posting all of the transcripts from the trial so far. You can take a look at the transcripts yourself here: https://thecapitolforum.com/google_antitrust_trial_2023/.

That’s all for today. Tomorrow we’ll hear more from Professor Almadoss as well as the States’ economic expert witness Jonathan Baker. I believe Baker is the States’ last witness, so the States should rest their case and hand the wheel over to Google either tomorrow or Thursday.