Sen. Warren requires investigation of Google’s “Project Bernanke”

In a letter to the Commodity Futures Trading Commission (CFTC) on Wednesday, Sen. Elizabeth Warren (D-MA) referred to as for an investigation of Google’s alleged manipulation of {the marketplace} for on-line adverts, opening the door for a brand new federal regulator for digital promoting markets.

Warren’s letter focuses on a program referred to as “Project Bernanke,” revealed in April as a part of a lawsuit in opposition to Google led by Texas Attorney General Ken Paxton. Under that program, Google allegedly used historic Google Ads knowledge to spice up shoppers’ possibilities of profitable auctions. The observe allegedly resulted in $230 million in further income for the corporate.

“Because Google was able to learn from rival ad buyers’ previous bidding data, its ad-buying tools gained a competitive advantage that ultimately boosted their win rates,” Warren writes within the letter. “While are investigating this activity for potential violations of the antitrust laws, the activity raises additional concerns that I believe may be within the CFTC’s jurisdiction and warrant close scrutiny.”

Reached for remark, a Google spokesperson mentioned the claims of market manipulation have been a mischaracterization of a easy product characteristic. “This was entirely implemented by Google Ads for buyers, using the kinds of data and strategies that are available to any buyer participating in an Ad Exchange auction,” the corporate mentioned. “Like many other businesses in this highly competitive field, we constantly work to improve our products and compete more effectively.”

Often neglected in favor of splashier sidelines, on-line advert markets have lengthy been the core of Google’s enterprise. In its most up-to-date quarterly earnings, the corporate reported greater than $44 billion in promoting income, making up greater than 80 % of the corporate’s general income.

Digital advert exchanges could be a brand new goal for the CFTC, which has conventionally handled commodity buying and selling and (extra not too long ago) cryptocurrency. But Warren argues that digital adverts fall inside the statutory definition of a commodity, and that CFTC regulation of the markets wouldn’t preempt different companies from taking motion. If the fee takes up Warren’s name to motion, it might be a big enlargement of its powers — and a big new headache for Google.

“Like high-frequency traders, ad exchanges provide in real time a platform for the sale of ad inventory each time a web page loads,” Warren writes. “Tens of billions of digital ads are traded on ad exchanges every day in the US. The market for digital advertising has become perhaps the most actively traded commodity exchange in the world.”

The letter comes at an unsure time for the CFTC, which remains to be awaiting new management from the Biden administration. Georgetown professor and former CFTC commissioner Chris Brummer has been advised as a frontrunner to guide the company. But Brummer has but to face Senate affirmation, the place Sen. Warren’s hopes for the company might be addressed straight.