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Google, Facebook’s CEOs oversaw a 2018 ad auction deal, the states claim




Facebook Chairman and CEO Mark Zuckerberg (L) and Google CEO Sundar Pichai.

REUTERS

Google and Facebook’s executives personally oversaw an illegal 2018 deal that diverted Facebook to Google’s ad auctions, a group of Texas-led state attorneys in a modified antitrust lawsuit against Google claimed Friday.

Facebook, recently renamed Meta, is not listed as a defendant in the complaint.

The new registration shows how far up the scheme, allegedly in previous registrations, went. Facebook chief operating officer Sheryl Sandberg, whose name has been edited in the complaint, called the deal “largely strategic”[ads1]; in an email with CEO Mark Zuckerberg, whose name was also edited. Sandberg and Google’s CEO Sundar Pichai signed the terms of the agreement, the states claim, and noted that Sandberg was previously a senior leader in Google’s advertising business. Sandberg’s sign-off was previously reported by The Wall Street Journal.

According to the third complaint in the case, Google entered into the agreement after Facebook announced a move that would help publishers and advertisers get around Google’s imposed advertising fees through their services. The states claimed that Google feared a long-term threat to the ad server monopoly if enough buyers were able to circumvent the fees.

Under the agreement, Google and Facebook illegally collaborated to reduce prices paid to publishers, cut out rival ad networks and manipulate publisher-run auction auctions, the complaint said.

An internal Facebook document cited in the complaint allegedly said that collaboration with Google would be “relatively inexpensive compared to building / buying and competing in zero-sum ad tech games.” Google is supposed to have the code name of the event “Jedi Blue”, with reference to Facebook’s blue logo.

The group of 16 states and Puerto Rico claimed that this and other actions Google took in the online advertising space tried to illegally preserve its monopoly power, and violated the Sherman Antitrust Act.

Google has previously strongly denied the allegations in the Texas-led lawsuit, and Economic Policy Director Adam Cohen called it a “misleading attack” in a 2021 blog post. A Google spokesman said the company would file a motion to dismiss next week, saying the case was still “full of inaccuracies and lacking in legal merit.”

A Google spokesman called the states’ characterization of the Facebook event inaccurate, saying, “We sign hundreds of agreements each year that do not require the approval of the CEO, and this was no different.”

The spokesperson added that the agreement was published at the time, and linked to a Facebook blog post from 2018 that called Google as one of its new partners for bidding technology.

Shares in Meta rose around 1% in the middle of the afternoon on Friday, while shares of Google rose around 0.65%.

The agreement, according to Google’s spokesperson, simply allows Facebook’s advertising network and advertisers it represents “to participate in open bidding, just as over 25 other partners do. It helps increase the demand for publishers’ advertising space and helps publishers earn more, which we explain here. “

A Meta spokesman said in a statement that its “non-exclusive bidding agreement with Google and similar agreements we have with other bidding platforms have helped increase competition for ad placements. These business relationships enable Meta to deliver more value to advertisers while is affordable. compensates publishers, resulting in better results for everyone. “

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