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Advertisement U.S. markets closed * S&P 500 4,335.66 +27.16 (+0.63%) * Dow 30 33,604.65 +197.07 (+0.59%) * Nasdaq 13,484.24 +52.90 (+0.39%) * Russell 2000 1,755.99 +10.44 (+0.60%) * Crude Oil 86.35 -0.03 (-0.03%) * Gold 1,875.30 +11.00 (+0.59%) * Silver 22.02 +0.10 (+0.46%) * EUR/USD 1.0571 +0.0002 (+0.02%) * 10-Yr Bond 4.7970 +0.0130 (+0.27%) * GBP/USD 1.2240 +0.0004 (+0.03%) * USD/JPY 148.4480 -0.0690 (-0.05%) * Bitcoin USD 27,594.73 -337.79 (-1.21%) * CMC Crypto 200 580.71 -11.11 (-1.88%) * FTSE 100 7,492.21 -2.37 (-0.03%) * Nikkei 225 30,994.67 -80.73 (-0.26%) BloombergBloomberg Google Changed Ad Auctions, Raising Prices 15%, Witness Says Read full article 3 * Oops! Something went wrong. Please try again later. More content below * GOOGL * Leah Nylen October 6, 2023 at 12:13 PM*2 min read [2fc402a8c9] In this article: * Oops! Something went wrong. Please try again later. More content below * GOOGL Watchlist (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. Most Read from Bloomberg * Israel Latest: Biden Says at Least 11 Americans Have Been Killed * Schumer Confronts Xi on Israel-Hamas Stance in Rare Meeting * Israel Latest: Over 1,100 Dead; US Sends Warships to Region * Stocks Shrug Off Losses After Fedspeak; Oil Climbs: Markets Wrap 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. "It's really easy to slip into the thought that it's an auction and an auction is competition," Whinston said, explaining how Google's ability to tweak the rules demonstrates its monopoly over online advertising. But "it's the advertisers who are running in this race. It's Google setting the rules." The Justice Department alleges that Google has illegally maintained a monopoly over online search by paying billions of dollars to web browsers and smartphone manufacturers to ensure it's the preselected option for users accessing the web. As part of those deals, Google pays Apple Inc., Samsung Electronics Co. and others a share of the revenue it earns from search advertising. Story continues About two-thirds, more than 60%, of Google's total revenue comes from search ads, Dischler said previously, amounting to more than $100 billion in 2020. Every year since 2012, the company's search ad revenue growth has been in the "high teens," according to documents shown by the Justice Department. Dischler testified on Sept. 19 that Google sometimes tweaked its advertising auctions to ensure it met revenue targets, but most of his testimony occurred in a sealed session. Whinston's comments Friday described Google's technique, called "squashing," that seeks to make the runner-up's bid more competitive. Google estimated that technique along with charging more for ads that used more words in their text would increase revenues by 15%. "Google has not been transparent about what they are doing" with pricing, Whinston said. But advertisers "do have ways of finding out even if they don't know exactly what Google is doing." Most Read from Bloomberg Businessweek * Worst US Bond Selloff Since 1787 Marks End of Free-Money Era * Can AI Beat the Market? Wall Street Is Desperate to Try * Despite Backlash, Companies Still Benefit From Being Pro-LGBTQ * With Banks Offering 5% Returns, Financial Advisers Fight Irrelevance * Tech IPOs Could Burn Firms Who Bought Into Hot Startups Too Late (c)2023 Bloomberg L.P. [ ] TRENDING * 1. Samsung Q3 profit set to slump 80% as chip losses persist * 2. Asia Stocks to Follow US Higher on Rate Optimism: Markets Wrap * 3. 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