July 29, 2026  ·  Complaint filed July 13, 2026  ·  United States District Court for the Southern District of New York, No. 1:26-cv-05886

Newman News, By David Brunk

Read the complaint

Valnet v. Google Alleges Ad Auction Schemes Depressed Publisher Revenue

Digital Advertising Market Growth Fuels Monopoly Concerns

The digital advertising business has grown exponentially, reaching a significant size, a rapid expansion that has intensified scrutiny of market practices, particularly those of dominant players like Google LLC and its parent company Alphabet Inc. Valnet Inc., a Canadian digital publisher, and its Delaware subsidiary Valnet US Inc. filed a complaint on July 13, 2026, alleging that Google and Alphabet monopolized critical digital-advertising markets through anticompetitive practices. The complaint cites internal Google documents in which employees acknowledged that schemes like "Last Look" and "Project Bernanke" were "inherently unfair" and "irrational but for [their] destruction of competition." The complaint states, "Google’s strong position at each level of the intermediation value chain creates clear conflicts of interest."

The complaint asserts several core causes of action against Google and Alphabet:

• Count 1: Monopolization of the market for general publisher ad servers for open display inventory in violation of Sherman Act, 15 U.S.C. § 2 (Google/Alphabet vs. Valnet). (Compl. ¶20)
• Count 2: Monopolization of the market for ad exchanges for open display inventory in violation of Sherman Act, 15 U.S.C. § 2 (Google/Alphabet vs. Valnet). (Compl. ¶99)
• Count 4: Unlawful tying in violation of Sherman Act, 15 U.S.C. § 1 (Google/Alphabet vs. Valnet). (Compl. ¶244)

Market Share and Tying Arrangement

According to the complaint, Google controls over 90% of the publisher-ad-server market and 60–70% of the ad exchange market, with most rivals holding single-digit shares. AdX transacted $7.6 billion in gross revenue in 2018, while rival exchanges charged take rates of 12–15%, compared to AdX's 20%. Google internally recognized 5% as a justified exchange rate, according to the filing.

Google's strategy centered on tying its ad server (DoubleClick for Publishers, or DFP) to its ad exchange (DoubleClick Ad Exchange, or AdX), forcing publishers to use both products as a bundled package. This tying arrangement, rebranded as Google Ad Manager (GAM) in 2018, effectively eliminated competition by restricting rival ad exchanges' access to publisher inventory and advertisers' demand. The complaint states, "Google’s strong position at each level of the intermediation value chain creates clear conflicts of interest." The tying scheme is further evidenced by Google's requirement that publishers use DFP to access AdX's real-time bidding functionality, as AdX submits real-time bids only to publishers using DFP. The complaint quotes an internal Google document stating, "an ad-server/ad exchange tie and other schemes to enforce Google’s ad server and ad exchange monopolies." The complaint also alleges that Google's control of the ad-server market grew from 78% in 2010 to over 90% by 2015, with rivals exiting the market due to Google's anticompetitive practices.

The complaint details how Google's control of both the ad server and ad exchange markets created inherent conflicts of interest, allowing it to route inventory preferentially to AdX while excluding competitors. Valnet, which reaches more than 300 million unique visitors each month across its portfolio of more than 27 brands, sells 97–98% of its ad inventory through the indirect sales channel, with only 2–3% sold through direct deals, which account for 6–7% of its digital advertising revenue. The complaint explains that a publisher ad server determines whether and how to fill ad inventory, prioritizing direct deals or soliciting bids from ad exchanges. The complaint further clarifies that CPM, or cost per mille, represents the price for 1,000 impressions, meaning a $0.01 bid equates to a $10 CPM. If all bids are rejected, the ad server may place a "house ad," such as a Valnet advertisement. The complaint also notes that publishers are paid per impression, not per click, and that each ad-tech product exacts a fee per impression.

Google's dominance in the publisher-ad-server market is further illustrated by its acquisition of DoubleClick in 2008, which included DFP and AdX. The complaint alleges that Google's market share in this segment grew from approximately 50% to over 90% due to the tying arrangement, not product superiority. The complaint states, "the owner of the exchange will abuse the ad server to route inventory to its exchange even when the publisher could make more money elsewhere." Google's control over both the ad server and exchange markets is further evidenced by its demand-side platforms (DSPs), Google Ads and Display & Video 360 (DV360), which the complaint alleges are designed to lock advertisers into AdX. Approximately 90% of Google Ads demand flows exclusively through AdX, and DV360 features are restricted to AdX participants. The complaint alleges that Google's ad-serving fees are 8x–11x higher than those of rivals, with an 8x difference for display ads and an 11x difference for video ads, despite offering no superior functionality. The complaint quotes an internal Google document stating, "Google charges a substantially higher ad serving fee than its rivals — at least eight times higher."

Auction Manipulation Schemes

The complaint details several schemes Google allegedly used to manipulate auctions and depress publisher revenue:

• Project Bernanke (2013–present): A bid-rigging program that deflated second-highest bids and inflated winning bids, reducing publisher revenue by up to 40%. The scheme generated hundreds of millions of dollars in additional profit for Google. The complaint alleges that Project Bernanke alone could depress publisher revenue "by upwards of 40%" and generated "many hundreds of millions of dollars" in additional profit. For example, in one instance, Google Ads bids were manipulated to AdX net bids. In another example, Google inflated a bid and deflated another, causing the publisher's payment to drop per impression while increasing Google's profit. The scheme was later rebranded as "Project Alchemist" and evolved into a global version in 2015. The complaint states, "Google steals money from publishers for billions of impressions every month."
• Last Look (2014–2019): Allowed AdX to see rivals' bids before submitting its own, enabling it to win auctions by a penny while paying publishers less. Google admitted in internal documents that Last Look was "inherently unfair." For example, a header-bidding bid would be beaten by an AdX bid, despite the highest possible bid being higher. This practice allowed AdX to win auctions with a lower bid, depressing publisher revenue. The complaint states, "Last Look is inherently unfair." The complaint also quotes an internal Google document acknowledging the informational advantage provided by Last Look.
• Dynamic Revenue Share (DRS, 2014–present): Secretly adjusted AdX's 20% take rate to win auctions by a penny, then increased fees for less competitive impressions. The complaint alleges that DRS allowed AdX to manipulate its revenue share dynamically. For instance, in one example, a header-bidding bid was met with an AdX bid (net of fees). AdX then reduced its fee, allowing it to win the auction. In another example, an AdX bid (net of fees) faced a header-bidding bid. AdX increased its revenue share, winning the auction. The complaint quotes an internal Google document stating, "This dynamic approach helped AdX advertisers win more auctions, and caused advertisers using third-party exchanges... to win fewer auctions." The complaint further alleges that DRS was part of a broader pattern of deceptive practices.
• Minimum Bid to Win (2019–present): Provided winning bidders with the second-highest auction price, enabling Google to cap AdX bids close to rivals' bids. The complaint alleges this provided functionally the same information as Last Look: the next highest price to beat. The complaint states, "Minimum Bid to Win thus provides functionally the same information as Last Look: The next highest price to beat." The complaint provides an example where the second-highest AdX bid was used to manipulate future auctions. The complaint alleges that Google's bidding algorithm used Minimum Bid to Win data to rig "hundreds of millions" of future auctions.
• Unified Pricing Rules (UPR, 2019–present): Eliminated differential price floors, forcing publishers to accept uniform pricing that disadvantaged rival exchanges. For example, if the highest bid in an auction was higher, UPR would allow AdX to submit a lower bid. The complaint alleges that UPR forced publishers to accept uniform pricing rules that further entrenched Google's dominance.

Enhanced Dynamic Allocation and Project Bernanke

Google's Enhanced Dynamic Allocation (EDA) scheme, introduced in 2014, allegedly forced publishers to make all inventory available to AdX, converting direct deals into temporary CPMs and prioritizing AdX over rivals. The complaint alleges that Google ignored actual direct-deal prices when calculating temporary CPMs, sometimes assigning values close to $0. The complaint states, "Google could assign it a temporary CPM much lower — indeed, even close to $0." For example, a direct-deal CPM could be assigned a temporary CPM "close to $0," effectively nullifying the publisher's direct deal. EDA's "Optimized Competition" algorithm further lowered direct-deal temporary CPMs, entrenching AdX's control and locking out rival exchanges from high-value inventory. The complaint quotes an internal Google document stating, "rather than earn publishers’ business, AdX stole it instead." The complaint also alleges that Google falsely represented EDA as a tool to "maximize yield" for publishers, while internally acknowledging that it improved only Google's yield, not publishers' bottom line. The complaint states, "Google never disclosed how temporary CPM or Optimized Competition work."

Project Bernanke, launched in 2013, allegedly deflated second-highest Google Ads bids and inflated winning bids to create a pool that subsidized AdX's dominance. The complaint provides an example where AdX bid to beat a rival exchange, while the advertiser was charged less. The scheme evolved into a global version in 2015 and was later rebranded as "Project Alchemist." Google allegedly applied the scheme on an auction-by-auction basis for billions of impressions, using the pool to beat rival exchanges even at a loss. The complaint states that Bernanke is "irrational but for its destruction of competition." The complaint also alleges that Google internally described the scheme as "Google steals money from publishers for billions of impressions every month." The complaint further details that Bernanke evolved into variations such as "Bell v.2," which punished publishers engaged in "multi-calling," a practice where publishers solicit bids from multiple exchanges.

The complaint alleges that Google's auction manipulation schemes extended to its demand-side platforms, Google Ads and DV360. In 2023, Google announced that Google Ads would not bid if a publisher used a third-party ad server, and in 2024, it announced that DV360 would follow the same policy. This effectively locked publishers into using DFP to access Google's demand, further entrenching its monopoly. The complaint alleges that Google's DSPs charge a higher take rate when buying through a non-Google exchange, compared to a baseline rate.

Broader Context

The case follows several antitrust actions targeting Google's digital-advertising practices, including a monopolization suit won by the U.S. and 17 states in April 2025 (United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va.)), and a case filed by Texas and 16 other states in December 2020 (Texas v. Google LLC, No. 20-cv-00957 (E.D. Tex.)). The European Commission also fined Google for abusive practices in online advertising. The U.K. Competition and Markets Authority and the Australian Competition and Consumer Commission have also released reports on Google's misconduct and self-preferencing in digital advertising. The U.S. House Antitrust Subcommittee released a report detailing Google's harm to the free press.

The Eastern District of Virginia held in April 2025 that Google "willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power" in the publisher ad server and ad exchange markets. The court's opinion found that Google's conduct was designed to "avoid[ ] direct head-to-head competition between AdX and other exchanges." The opinion also noted that "Google’s changes to the auction rules decreased product quality and harmed competition by further entrenching Google as the dominant company..." On October 27, 2025, the Southern District of New York gave preclusive effect to the E.D. Va. opinion in In re Google Digital Advertising Antitrust Litigation, further bolstering Valnet's claims. The S.D.N.Y. ruling cited Google's anticompetitive conduct as established fact, including the finding that "Google has used its market power in adjacent segments of the ad tech ecosystem to make it difficult for customers on both sides of the ad exchange market to switch to rival exchanges." The S.D.N.Y. also held that "there is no other ad tech tool that is reasonably interchangeable with ad exchanges."

The complaint alleges that Google's anticompetitive conduct has had a significant impact on the digital advertising ecosystem, including the exit of several ad-server and ad-exchange competitors. Former ad-server competitors such as Yahoo!, OpenX, 24/7 Real Media, aQuantive, and ValueClick have exited the market, while ad exchanges like AdECN, AdBrite, and ASDAQ have become defunct. Microsoft acquired Xandr (formerly AppNexus) in June 2022, but the complaint alleges that Google's anticompetitive practices have stifled competition in the ad-tech stack. The complaint also references internal Google employees, including Jason Bigler, Jonathan Bellack, and Sam Cox, who are cited in documents related to the alleged schemes.

The allegations in the complaint are unproven, and no defendant has yet responded.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.