Google and Facbook: an illegal agreement against publishers and advertisers leaks

Google and Facbook: an illegal agreement against publishers and advertisers leaks

Google CEO Sundar Pichai and Meta CEO Mark Zuckerberg personally signed an illegal advertising deal in 2018, according to US court documents just not drafted which affirm the collusion at the top of both companies.

According to the complaint, first filed by a coalition of states in 2020, the deal ensured that Facebook would participate in and win a fixed percentage of Google’s online ad auctions, in what plaintiffs describe as an “illegal deal for the pricing “.

As Insider’s Lara O’Reilly wrote in April, Google dominates how marketers buy ads, the technology sites use to sell ads, and the exchange that links the two. The lawsuit alleges that Google used its dominance and “exclusion tactics” to distort competition in online ads.

Most of the allegations in the lawsuit stem from Google’s fear of “header bidding,” an alternative to its ad auctioning practices described as an “existential threat” to the company.

The header offering was developed by a roster of independent ad technology players competing with Google as a way to democratize how ad spaces on publisher sites are filled and maximize their ad revenue.

According to the lawsuit, Google executives were concerned about Facebook’s first moves in this space around 2017 and sought to engage the rival tech giant as a partner rather than risking more competition.

The lawsuit cites an email from Facebook COO Sheryl Sandberg, sent to Zuckerberg and other executives, in which he describes the potential partnership as “a big deal strategically.”

The names of the managers are written, but their titles are reported in the suit.

Sandberg is assumed to have followed an email sent directly to Zuckerberg, writing, “We are almost ready to sign and need your approval to move forward.”

The email allegedly sent by Facebook's Sheryl Sandberg to CEO Mark Zuckerberg.

The email allegedly sent by Facebook’s Sheryl Sandberg to CEO Mark Zuckerberg.Texas AG

It was previously reported that this 2018 deal, internally codenamed “Jedi Blue,” would be signed by Sandberg and Google’s chief business officer Phillip Schindler.

The unedited lawsuit also contains further details of the “Bernanke Project,” a covert initiative through which Google allegedly used bidding data collected from external advertisers using its exchange for the benefit of its own advertising system. The Project Bernanke allegations seemed to support industry concerns that Google, which dominates every aspect of the online advertising ecosystem, gives it an edge over more specialized companies.

The lawsuit alleges that Google’s AdX exchange sometimes overloaded advertisers bidding for space on publishers’ websites, allowing the tech giant to pocket the difference.

These additional funds were then pooled and redistributed among advertisers bidding for the space using Google tools, in order to artificially boost their performance, according to the complaint.

The antitrust lawsuit was first filed in 2020, led by Ken Paxton, the attorney general of Texas, and was originally heavily drafted. The new revelations follow a judge’s order on Friday to quash parts of the amended complaint.

Paxton led a coalition of states that claimed the tech giant had used “exclusion tactics” to distort competition in the online ad market.

Google previously told Insider that Paxton’s lawsuit was “without merit,” adding, “We will vigorously defend ourselves against your baseless claims in court.”

A spokesperson for the company Meta told The Guardian on Friday: “These business relationships allow Meta to offer more value to advertisers by compensating publishers fairly, with better results for all.”

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