Google, Facebook CEOs oversaw a 2018 ad auction deal, states allege

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

Reuters

The CEOs of Google and Facebook personally oversaw an illegal deal in 2018 that gave Facebook an edge in Google Ad Auctions, a group of Texas-led state attorneys general alleging in an amended antitrust complaint against Google on Friday.

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

The new filing shows how far the arrangement has come, alleged in previous filings. Sheryl Sandberg, Facebook’s chief operating officer, whose name has been deleted in the complaint, called the agreement a “strategically big deal” in an email including CEO Mark Zuckerberg, whose name was also deleted. States claimed that Sandberg and Google CEO Sundar Pichai had signed the terms of the deal, noting that Sandberg was previously a high-ranking advertising executive at Google. The Wall Street Journal previously reported Sandberg’s signing.

According to the third amended complaint in the case, Google sealed the deal after Facebook announced a move that would help publishers and advertisers get around fees charged by Google for advertising through their services. The states have claimed that Google fears a long-term threat to its ad server monopoly if enough buyers can get around its fees.

Under the agreement, Google and Facebook have illegally collaborated to lower the prices paid to publishers, cut off competing ad networks and manipulate ad auctions run by publishers, according to the complaint.

An internal Facebook document published in the complaint allegedly said that partnering with Google would be “relatively cheap compared to building/buying and competing in a zero-sum ad tech game.” Google allegedly named the arrangement “Jedi Blue,” a reference to Facebook’s blue logo.

The group of 16 states and Puerto Rico alleged that this and other actions Google took in online advertising sought to illegally maintain its monopoly power, in violation of the Sherman Antitrust Act.

Google previously strongly rejected the allegations in the Texas-led lawsuit, with Economic Policy Director Adam Cohen calling them a “disinformation attack” in a 2021 blog post. A Google spokesperson said the company would file a rejection request next week, and said the case was still “rife with inaccurate information and lacking legal merit”.

A Google spokesperson called states’ characterization of Facebook’s rankings inaccurate, saying: “We sign hundreds of agreements each year that don’t require CEO approval, and this was no different.”

The agreement was announced at the time, the spokesperson added, as it was linked to a Facebook blog from 2018 that ranks Google as one of its new bidding technology partners.

Meta shares are up about 1% mid-afternoon on Friday while Google shares are up about 0.65%.

The agreement, according to a Google spokesperson, simply allows the Facebook ad network and the advertisers it represents “to participate in Open Bidding, just as more than 25 other partners do. This helps drive demand for the publisher’s ad space and helps publishers earn more revenue, as we explain here.” “.

A Meta spokesperson said in a statement, “The 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 equitably deliver more value to advertisers to compensate publishers, leading to to better results for all.

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