But since google auctions ads, Case A results in higher prices to the non-Google ad buyers. So it’s better than neutral.

Google can 'print' as many ad spaces as they want, and buy back the ones that don't reach their minimum price.

.. and your objection to that is?

I’m not following the logic of how Google’s camera comparison shopping business is unfairly more profitable just because it’s bolted onto an immensely profitable ad company.

The issue is that they're using their position as an advertising near-monopoly to choke out competitors' ability to advertise their products. The particular mechanism[1] is not the issue; using it to deprive competitors of the ability to advertise at reasonable prices is the issue.

Imagine you're a car salesyard in a small town. You don't want your competitors to be able to advertise, so you buy the company that publishes the only newspaper in town. You don't want to be accused of being out-and-out anticompetitive, so you still let your rivals advertise, but you charge them $500 per car advertised. Is this OK?

[1] Although this particular mechanism seems pretty dubious and may even qualify as "shill bidding", which is forbidden at other auction venues such as eBay: http://pages.ebay.com/help/policies/seller-Shill-bidding.htm...