Maybe it's too early, but that article was not clear to me. Is it alleged that Google incorrectly stated the value of the second place bidder in order to make it look higher, in order to pressure the first place bidder to bid higher? Even that doesn't make much sense, so I'm missing something.
> The shift sought “to raise the prices against the highest bidder,” Whinston told Judge Amit Mehta in federal court in Washington... 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... Whinston’s comments Friday described Google’s technique, called “squashing,” that seeks to make the runner-up’s bid more competitive.
If they're inflating the second-place bid to be higher than the first-place bid, I'd wonder why that wouldn't backfire for them and result in the second highest bid winning a lot of the time. And if they didn't inflate it above the first-place bid, why would the winning bidder feel any pressure to increase their bid?
I'm sure it all makes sense, it's just not clear to me from this explanation.
> The shift sought “to raise the prices against the highest bidder,” Whinston told Judge Amit Mehta in federal court in Washington... 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... Whinston’s comments Friday described Google’s technique, called “squashing,” that seeks to make the runner-up’s bid more competitive.
If they're inflating the second-place bid to be higher than the first-place bid, I'd wonder why that wouldn't backfire for them and result in the second highest bid winning a lot of the time. And if they didn't inflate it above the first-place bid, why would the winning bidder feel any pressure to increase their bid?
I'm sure it all makes sense, it's just not clear to me from this explanation.