Google's 'Project Bernanke' benefitted the company's own ad-buying system

"If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire"

Documents detailing a a secretive Google scheme called 'Project Bernanke' have come to light in an antitrust case in Texas. They appear to show that Google used bidding data from outside advertisers using Google's ad exchange to benefit its own ad-buying system over competitors.

Google accidentally revealed details of the project in an unredacted document it filed as part of the lawsuit. A federal judge has allowed Google to resubmit the properly-redacted document under seal.

The Wall Street Journal, which reviewed the initial unredacted document, says the 'Bernanke' system was not disclosed to publishers and other rivals, bringing in millions of dollars for Google each year. The search giant allegedly ran the project for 'several years'.

In the unredacted filing, Google claimed that the data from the Bernanke system was 'comparable to data maintained by other buying tools'.

According to the WSJ, the Bernanke system used data from past bids made in Google Ads to create advantages for Google's own ad buying. The situation is a little complex, as Google both operates its ad exchange, represents buyers and sellers on the exchange, and acts as a buyer in its own right. In a nutshell, the firm used the data from other advertisers' past bids to understand what they were paying publishers for ad impressions. This enabled the search giant to advise its own clients to change their bids, to increase their chances of winning ad auctions.

In the court documents, Texas cited an internal presentation from 2013 that showed that Project Bernanke was expected to bring in $230 million in revenue for that year alone. It alleges that Google's use of its own ad platform to benefit its clients amounts to a form of insider trading.

The court filings also revealed details about 'Jedi Blue', a secret deal between Facebook and Google where both companies agreed that Facebook would not compete with Google in online advertising, in return for favoured treatment in Google's ad auctions.

When the lawsuit was filed in December, Texas Attorney General Ken Paxton said that Google was using its market power to control pricing and "engage in market collusion to rig auctions."

"If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire," he said.

However, Texas lawsuit is not the only antitrust challenge Google is facing.

Last October, the US Department of Justice filed a long-awaited lawsuit against the company, alleging that it had become a "gatekeeper" to the Internet with its search dominance.

In March, a federal judge rejected Google's motion to dismiss a class-action lawsuit, which accused the company of collecting users' data even when using Chrome's Incognito mode.

Three Google users filed the suit in June 2020, alleging that Google tracks web activity even in private browsing mode, without 'a legitimate business interest' and without their consent.

The lawsuit added that in some instances, other websites that used Google Ad Manager or Google Analytics sent 'a secret, separate message' to Google's servers in California.

The users are seeking at least $5 billion (£3.6 billion), or $5,000 (about £3,600) per violation, for 'likely' millions of users.