Lawsuit claims Facebook and Google CEOs were aware of deal to control advertising sales | Technology

Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai allegedly knew and agreed to a deal to cooperate in potential ad sales manipulation, according to newly disclosed documents.

The documents, which were revealed on Friday, were filed as part of a lawsuit against Google that was filed by prosecutors in several US states. The lawsuit was first filed in December 2020 and alleges that Google misled publishers and advertisers about the price and process of ad auctions. At the time, many documents and parts of the lawsuit were redacted, but court decisions have since made them public.

The lawsuit alleges that Google retained control of the ad sales market – a market it dominates – by inflating the advertising price for brands and suppressing competition from other ad exchanges.

According to the Wall Street Journal, the complaint alleges that “Google took the difference between what it told publishers and advertisers the cost of advertising and used the pool of money to manipulate future auctions to expand its digital monopoly.” The documents also refer to internal messages in which Google employees said it was like they were using “inside information” to grow the business.

The magazine reported that the lawsuit is also asking executives from both Facebook, which was recently renamed Meta, and Google signed a deal to confirm claims that Facebook will bid on and win a certain percentage of ads.

According to the lawsuit, Facebook’s chief operating officer, Sheryl Sandberg, “was outspoken that ‘this is a strategically big deal’ in a 2018 email thread about the deal that included Facebook’s CEO.”

When the two sides worked out the terms of the agreement, the team “sent an email addressed directly to CEO” Zuckerberg, according to the lawsuit.

If Pichai personally agreed to the deal, it could turn out to be complicit in expanding Google’s monopoly on the advertising market through manipulation. A Google spokesperson told the Associated Press that while the deal was not a secret, it would be inaccurate to say Pichai agreed to it.

“We sign hundreds of agreements each year that do not require CEO approval, and this was no different,” the spokesperson said.

In a statement, Google spokesperson Peter Schottenfels said the lawsuit was “full of inaccurate information and lacking legal merit.”

Meta spokesperson Chris Sgro said Friday that the company’s ad serving agreement with Google and similar agreements with other bidding platforms have “helped increase competition for ad placements.”

“These business relationships enable Meta to deliver more value to advertisers while compensating publishers fairly, resulting in better outcomes for everyone,” said Sgro.

The new details come as tech companies face increased scrutiny over alleged anti-competitive practices. A US judge ruled earlier this week that the government could proceed with a lawsuit seeking to break up Meta, the parent company of Facebook, Instagram and WhatsApp, in a bid to loosen its grip on the market. On Friday, a group of about four dozen states requested that a separate antitrust lawsuit be reinstated against the company.

Meanwhile, Google faces antitrust charges brought by the US government. Google denied the charges.

Leave a Comment