Mark Zuckerberg and Sundar Pichai were involved in ad collusion plot, claims court filing

On Friday, a coalition of state attorneys general led by Texas Attorney General Ken Paxton issued a new antitrust complaint (PDF) against Google, giving more details about the company’s alleged collusion with Facebook in the automated ad markets. Submission was first reported by Politico.

The initial complaint (PDF) was first filed in November, alleging widespread collusion between the two companies, particularly in a collaborative venture codenamed “Jedi Blue” that saw companies join together to curb key bidding practices.

Relying on internal emails, Friday’s complaint shows that the Jedi Blue deal has been reviewed at the highest levels in both companies, with personal involvement from Sundar Pichai, Sheryl Sandberg and Mark Zuckerberg. In one email to Zuckerberg, Sandberg told the CEO “[t]It has a big deal strategically.” Notably, the registry refers to Zuckerberg and Sandberg by their job titles but the name is redacted.

The legal implications of the allegations are still in dispute, and the distinction between normal business practices and anti-competitive behavior will be debated in court. However, state prosecutors are successful in hunting for a number of moments when the two advertising giants appear to be settling into a cooperative duopoly.

In one particularly uncomfortable passage, the complaint quoted a 2015 email “in which Google employees expressed concerns that the Google exchange might “actually have to compete” with other exchanges at some point in the future.”

Much of the case relies on concessions Google allegedly made to Facebook in the wake of the Jedi Blue arrangement, including lower fees and longer lead time limits in cross-bidding. A new part of the complaint that hasn’t been modified recently claims that the franchises gave Facebook a clear advantage in winning auctions.

One study on Facebook in 2019 found that Facebook’s offers for in-app impressions won more frequently in auctions operated by Google than on any other platform. At the same time, the average price Facebook paid per in-app impressions was lower at auctions operated by Google than on any other platform. This would be a perplexing result, to say the least, if Facebook faced the same competition for inventory across auction houses.

The case comes amid a range of antitrust actions against Google, including parallel antitrust cases that focus on the manipulation and management of search for the Google Play Store. But the Texas complaint is arguably the most significant for the company, as it focuses on automated ad networks that have long provided the bulk of the company’s revenue.

Google did not immediately respond to a request for comment, but described the complaint as “full of inaccurate information and lacking legal merit” in a statement. Politico.

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