Google did the second type and then got caught lying about bids. Doing so is really tempting but also generally fraud.
It's unclear why a penny is considered the legal adder, why not 15% more? If this is all disclosed in Google's terms of service, is it really fraud?
E2a: https://en.m.wikipedia.org/wiki/Generalized_second-price_auc...
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.
“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 never helps the second-place bidder. I’d argue “handicap” is deceitful.
> Google’s advertising auctions require the winner to pay only a penny more than the runner-up.
> “Google has not been transparent about what they are doing” with pricing, Whinston said.