Google, Facebook Helped Each Other in Reducing Online Ad Competition: Draft Antitrust Complaint

Google and Facebook have been in a lot of trouble, with multiple antitrust and anti-competition cases against the two tech giants. Now, a fresh report pours a bit more fuel in the fire as the two companies are alleged to be helping each other in terms of reducing ad competition. According to a New York Times report, Google gave Facebook a “sweetheart deal” as Facebook joined an alliance of companies backing an online advertising model from Google.

According to the report, the details of the agreement were uncovered in documents obtained from the Texas antitrust lawsuit. According to the document, Facebook received special treatment in the Google-led alliance, as opposed to other more than 20 partners. Executives at six of these companies told The New York Times that their agreement with Google did not include the same generous terms that Facebook received and that Facebook had a significant advantage over the rest of them. The agreement, codenamed “Jedi Blue” inside Google, gave Facebook favours in ad header bidding, where sites could solicit ad space bids from multiple exchanges at once, in return for backing Google’s Open Bidding approach to sell those ads.

This means that Facebook had more time to bid for ads, direct billing deals with the sites housing the ads, and got help from Google to understand ad audiences. As part of the agreement, Facebook said it would bid on at least 90 percent of the ad auctions when it could identify users and promised minimum spending levels of up to $500 million (roughly Rs 3,660 crores) per year. Facebook also asked Google to avoid using bid information to manipulate the ad auctions in its favour, according to The New York Times report.

The most serious claim, according to the NYT report, was that the two companies had determined a that Facebook would win a fixed percentage of auctions that it bid on. The report further quoted both the companies as saying that the deal is not an antitrust matter, and they included a clause in the agreement that requires that parties to “cooperate and assist” each other if they are investigated for competition concerns over the deal. “The word ‘antitrust’ is mentioned no less than 20 times throughout the agreement,” the draft complaint was quoted by NYT as saying.

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