There’s two common kinds of auction those with multiple rounds where the final bid wins and those where everyone puts in the maximum amount upfront and the winner pays whatever #2 bid. The second type is much faster but incentivizes the auction house to lie about the #2 bid.
Google did the second type and then got caught lying about bids. Doing so is really tempting but also generally fraud.
Edit again - I stand corrected, while it is true that the standard implementation is as I said, seems from TFA Google’s implementation is second-place+0.01.
They disclose its second place + 0.01, but the article says they lied and raised it by 15%.
“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.”
“Google gave the second-place bidder a built-in handicap to make their offer more competitive” is the tamest way of phrasing it, given that the “handicap”’s only effect is to cost the first-place bidder more money.
It never helps the second-place bidder. I’d argue “handicap” is deceitful.
Google did the second type and then got caught lying about bids. Doing so is really tempting but also generally fraud.