- As the second week of the US v. Google antitrust trial commences, the Department of Justice is zeroing in on the primary revenue driver behind Google Search: advertisements. The allegation is that Google's dominant position enables it to increase ad prices for advertisers without facing significant consequences. This claim is supported by the testimony of Google ads executive Jerry Dischler during the trial.
- In his testimony, as reported by Bloomberg, Dischler described statements he made under oath in 2020. He revealed that Google makes adjustments to its auction process that may have resulted in a 5% price increase for the average advertiser in the past and, in some cases, could have raised prices by as much as 10% for specific queries. Importantly, advertisers were typically unaware of these price adjustments, as "we tend not to inform advertisers about pricing changes," according to Dischler.
Why it matters
During his court testimony, Dischler clarified that a 10% price increase represented the upper limit, and a 15% increase would be considered "a risky move." However, he acknowledged that overall revenue could still rise even if such high rates drove some advertisers to switch to competitors like Meta or TikTok. The trial, in which Dischler is set to continue his testimony, is expected to extend into November, with a verdict not anticipated until the following year.
