‘Bernanke,’ high fees and that defense deal with Facebook: 8 takeaways from the new filing in Google lawsuit

New details have been unsealed in the states' antitrust suit against Google for anticompetitive behavior in the ads market.

Moody Google Logo

Google is facing complaints by government competition enforcers on several fronts.

Photo: Drew Angerer/Getty Images

Up to 22%: That's the fee Google charges publishers for sales on its online ad exchanges, according to newly unredacted details in a complaint by several state attorneys general.

The figure is just one of the many details that a court allowed the states to unveil Friday. Many had more or less remained secrets inside Google and the online publishing industry, even through prior legal complaints and eager public interest.

The filing is a renewed set of allegations by the Texas-led coalition, which is now part of a class-action lawsuit alleging Google abuses its dominant position in the sale of online ad space.

The company is facing complaints by government competition enforcers on several fronts, including one led by the U.S. Justice Department focused on distribution of the company's marquee search engine and one led by Utah that has zeroed in on Google's mobile operations.

The ads suit, however, aims at the core of Google's profits: the company's operation of the biggest tools for buying and selling online ad space. It also runs the auctions systems that tie publishers and advertisers together, which "processes about 11 billion online ad spaces each day," according to the new complaint.

The lawsuit landed at the end of 2020, alleging in particular that Google made a deal with Facebook to offer the latter a leg-up in ad auctions so that Facebook would back off of support for a technique that publishers used to avoid Google properties.

Google has said it routinely pursues partnerships with major players in the market, has lowered overall fees for ads and gives priority in auctions based on objective criteria like website speed rather than to its own properties.

While the new details don't change the overall substance of the complaint, they flesh out what Google officials thought as they acted, what the company's agreements looked like and how Google referred to its many projects.

Here are the details.

About that 22%...

"Google's exchange charges publishers 19 to 22 percent of exchange clearing prices, which is double to quadruple the prices of some of its nearest exchange competitors," the states write.


The unsealed details build on the original complaint's references to another system that matches buyers and sellers: the New York Stock Exchange. The states contend that Google's ownership of its ads exchange and involvement on both sides of many transactions demonstrate a fundamental unfairness that would never be allowed in high finance.

"As one senior Google employee admitted, '[t]he analogy would be if Goldman or Citibank owned the NYSE,'" the new complaint says. The states add that the analogy would actually be more accurate "if Goldman or Citibank were a monopoly financial broker and owned the NYSE, which was a monopoly stock exchange."

Code names — and more finance

While media reports had quickly established "Jedi Blue" as the redacted name of the Facebook deal when the original suit landed, Friday's filing unveiled further code names. One called "Poirot," presumably in honor of Agatha Christie's fussy Belgian detective, was intended to "detect and reduce spending on non-Google exchanges." There were also "Bell" and "Elmo," which apparently both used "inside information to privilege Google's exchange over rival exchanges."

Then there were more details on Project Bernanke — yes, as in former Federal Reserve chair Ben. The project, which Google itself had accidentally disclosed, allegedly "privileged access to detailed information regarding what advertisers historically bid to help advertisers using Google Ads beat the advertisers bidding through competitors' ad buying tools." It's not clear how the project got its name.

Children's privacy

The states had already disclosed an August 2019 meeting Google took with Facebook, Apple, Microsoft and other tech companies, focused on privacy. But the new material shows that, in the words of the states, "Google expressed particular concern that Microsoft was taking child privacy more seriously than Google and sought to rein in Microsoft." Google apparently also worried that Facebook was conceding too much on privacy to appease angry lawmakers.

The longtime antitrust war between Google and Microsoft has gotten hot again, with Microsoft more or less cooperating with the probe leading to the Justice Department's complaint and the two clashing over Microsoft's production of documents for Google's defense in the U.S. lawsuit.

'Privacy Sandbox'

Speaking of privacy, the states' latest complaint says that the initiative that became "Privacy Sandbox" — the now-delayed plan for Google's Chrome browser to phase out support for third-party cookies — started out as something called Project NERA. Google said internally that the project's goal was to "successfully mimic a walled garden across the open web [so] we can protect our margins."

The states alleged that meant using Chrome to track users, rendering publishers' cookies and tracking far less valuable, then offering "to give publishers the ability to tap into Google's now-deeper trove of user data in exchange for the publishers' agreement to give Google exclusive control over their ad space."

Facebook's lure

According to the states' complaint, Facebook's flirtation with header bidding — the technique that allowed publishers to route more of their inventory around Google's systems, much to Google's alarm — was mainly an 18-month strategy to play on Google's fears rather than an actual plan it expected to implement, and Facebook eagerly pursued a deal it viewed as "relatively cheap compared to build/buy and compete in zero-sum ad tech game."

What Facebook got

The states outline much more about Google's deal with Facebook: The latter was allegedly allowed to circumvent some systems, and Google charged Facebook a lower fee of 5% to 10%. Facebook was also prohibited from speaking publicly about its "special lower pricing terms."

According to the new filing by the states, Google also let Facebook have "direct billing and contractual relationships with publishers," even though Google prohibits similar networks having such relationships. And Google also allegedly told "Facebook which impressions are likely targeted to spam" — something other networks had unsuccessfully sought.

Facebook gets to approve Google's defense too

The redacted version of the complaint suggested that Google and Facebook would "cooperate" in antitrust probes springing from "Jedi Blue," but the newly unveiled details go further, alleging that the two must "coordinate on antitrust defenses, such that Facebook must approve any and all arguments that Google presents relating to their illegal agreement."

Facebook of course has its own antitrust woes, though for now those largely relate to the Federal Trade Commission's lawsuit over its acquisition strategies.


Data privacy and harassment could spoil Grindr’s Wall Street romance

As it pursues a long-held goal of going public, the gay dating app has to confront its demons.

Grindr may finally be a public company.

Illustration: woocat/iStock/Getty Images Plus; Protocol

Grindr's looking for more than just a hookup with Wall Street. Finding a stable relationship may be tough.

The location-based dating app favored by gay men was a pioneer, predating Tinder by three years. It’s bounced from owner to owner after founder Joel Simkhai sold it in 2018 for $245 million. A SPAC merger could be the answer, but businesses serving the LGBTQ+ community have had trouble courting investors. And Grindr has its own unique set of challenges.

Keep Reading Show less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol, covering breaking news. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

Sponsored Content

Why the digital transformation of industries is creating a more sustainable future

Qualcomm’s chief sustainability officer Angela Baker on how companies can view going “digital” as a way not only toward growth, as laid out in a recent report, but also toward establishing and meeting environmental, social and governance goals.

Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.

But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.

Inside the Crypto Cannabis Club

As crypto crashes, an NFT weed club holds on to the high.

The Crypto Cannabis Club’s Discord has 23,000 subscribers, with 28 chapters globally.

Photo: Nat Rubio-Licht/Protocol

On a Saturday night in downtown Los Angeles, a group of high strangers gathered in a smoky, colorful venue less than a mile from Crypto.com Arena. The vibe was relaxed but excited, and the partygoers, many of whom were meeting each other for the very first time, greeted each other like old friends, calling each other by their Discord names. The mood was celebratory: The Crypto Cannabis Club, an NFT community for stoners, was gathering to celebrate the launch of its metaverse dispensary.

The warmth and belonging of the weed-filled party was a contrast to the metaverse store, which was underwhelming by comparison. But the dispensary launch and the NFTs required to buy into the group are just an excuse: As with most Web3 projects, it’s really about the community. Even though crypto is crashing, taking NFTs with it, the Crypto Cannabis Club is unphased, CEO Ryan Hunter told Protocol.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.


The minerals we need to save the planet are getting way too expensive

Supply chain problems and rising demand have sent prices spiraling upward for the minerals and metals essential for the clean energy transition.

Critical mineral prices have exploded over the past year.

Photo: Andrey Rudakov/Bloomberg via Getty Images

The newest source of the alarm bells echoing throughout the renewables industry? Spiking critical mineral and metal prices.

According to a new report from the International Energy Agency, a maelstrom of rising demand and tattered supply chains have caused prices for the materials needed for clean energy technologies to soar in the last year. And this increase has only accelerated since 2022 began.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).


The 911 system is outdated. Updating it to the cloud is risky.

Unlike tech companies, emergency services departments can’t afford to make mistakes when migrating to the cloud. Integrating new software in an industry where there’s no margin for error is risky, and sometimes deadly.

In an industry where seconds can mean the difference between life and death, many public safety departments are hesitant to take risks on new cloud-based technologies.

Illustration: Christopher T. Fong/Protocol

Dialing 911 could be the most important phone call you will ever make. But what happens when the software that’s supposed to deliver that call fails you? It may seem simple, but the technology behind a call for help is complicated, and when it fails, deadly.

The infrastructure supporting emergency contact centers is one of the most critical assets for any city, town or local government. But just as the pandemic exposed the creaky tech infrastructure that runs local governments, in many cases the technology in those call centers is outdated and hasn’t been touched for decades.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.

Latest Stories