What about that “black box” that determines ranking of Google’s auctions results based on the value the ad represents to Google ? (Booking’s dollars are greener than mine ?)
The news: Source: Bloomberg
Alphabet Inc.’s Google changed its advertising auction formula in 2017, raising prices by 15% and likely making the company billions of dollars in additional revenue, according to an economist testifying for the US Justice Department in the antitrust case against the search giant.
Michael Whinston, a professor of economics at the Massachusetts Institute of Technology, said Friday that Google modified the way it sold text ads via “Project Momiji” – named for the wooden Japanese dolls that have a hidden space for friends to exchange secret messages. The shift sought “to raise the prices against the highest bidder,” Whinston told Judge Amit Mehta in federal court in Washington.
Google’s advertising auctions require the winner to pay only a penny more than the runner-up. In 2016, the company discovered that the runner-up had often bid only 80% of the winner’s offer. To help eliminate that 20% between the runner-up and what the winner was willing to pay, Google gave the second-place bidder a built-in handicap to make their offer more competitive, Whinston said, citing internal emails and sealed testimony by Google finance executive Jerry Dischler earlier in the case.
Continues here: Google Changed Ad Auctions, Raising Prices 15%, Witness Says
The law: Source: EU.
1. Providers of online intermediation services shall set out in their terms and conditions the main parameters determining ranking and the reasons for the relative importance of those main parameters as opposed to other parameters.
3. Where the main parameters include the possibility to influence ranking against any direct or indirect remuneration paid by business users or corporate website users to the respective provider, that provider shall also set out a description of those possibilities and of the effects of such remuneration on ranking in accordance with the requirements set out in paragraphs 1 and 2.
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