Google and Facebook allegedly had a secret deal to dominate ad market, lawsuit says

Google and Facebook allegedly had a secret deal to dominate ad market, lawsuit says
In recent years, governments have gotten increasingly worried about Big Tech's dealings, with tons of anti-trust probes popping up all over the world. An ongoing multistate suit in the US led by Texas Attorney General Ken Paxton has just unveiled some juicy details about dealings between Google and Facebook.

Allegedly, the search giant and the social media company (now known as Meta), had a behind-the-curtains agreement, which would give Facebook an unfair advantage when using Google's advertising exchange. Thus, making it easier for Facebook results to pop up on ad spaces.

Where the case gets spicy is recently unredacted information, which claims that Meta (Facebook) CEO Mark Zuckerberg and Alphabet (Google) CEO Sundar Pichai were both very well acquainted with what the deal is supposed to achieve. Furthermore, Facebook COO Sheryl Sandberg has been quoted as saying that "This is a big deal strategically" in a string of 2018 emails that have been uncovered during the suit.

Another email sets up a meeting between Sandberg and Zuckerberg and explicitly states that the deal will be signed only with the latter's approval. The lawsuit also alleges that Sundar Pichai was also personally acquainted with the terms of the arrangement.

Google, being the fan of quirky code names that it is, even had an internal "secret" name for the deal — it was named Jedi Blue, as per the case documents.

Both companies deny that their arrangement was illegal. Google spokesperson Peter Schottenfels calls the whole lawsuit "full of inaccuracies" and lacking legal merit. He further added "We sign hundreds of agreements every year that don’t require CEO approval, and this was no different", insisting that Sundar Pichai may not have known all the details about the deal.

Meta spokesperson Chris Sgro insisted that Facebook has similar ad bidding agreements with many other bidding platforms and they have helped increase the competition for ad placements, while still compensating publishers fairly and bringing a good amount of value to advertisers.

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It's worth noting, Meta is not a defendant in this lawsuit — it's strictly against Google

What's the multistate suit against Google about?

Back in December of 2020, ten states (Texas, Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota, and Utah) filed an anti-competitive conduct lawsuit against Google in a federal court in Texas. The suit was announced and is being led by Texas Attorney General Ken Paxton.

The Google and Facebook arrangement is at the core of the lawsuit, but it also points out the fact that Google controls the Ad Tech marketplace, which is supposed to bring advertisers and content creators together in an unbiased manner.

Google absolutely denies to be abusing its power and states that it readily shares the majority of its Ad Tech revenue with 3rd party publishers.

And this whole ordeal is an entirely separate case to the Justice Department suing Google over abuse of its online search and advertising dominance. In this filing from October 2020, it's alleged that Google uses the millions of dollars its search and ad businesses generate to pay its Android phone manufacturing partners to keep Google services as default on their smartphones. Thus, creating a closed off loop, which doesn't let outsiders in easily.

On this one, Google claimed that the accusation is deeply flawed and pointed out that there are plenty of alternatives — people just choose to use Google.

The anti-trust probes just keep piling on and Google isn't the only one in the scopes — the Justice Dept. and FTC are also actively investigating Apple, Amazon, and Facebook, among other tech companies.

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