The chief executives of big tech companies Google and Facebook personally oversaw an illegal 2018 deal that gave the latter advantage on the former’s ad auctions. This has been alleged by a group of state attorneys general in an amended antitrust complaint against Google.
The search engine giant has also been alleged of manipulating its ad pricing tiers under a secret program called Project Bernanke. It removed second-place bids on ad auctions. Reports highlight that it allowed Google to bag part of the difference between first and third-place bids while also harming publishers that rely on ad revenue and who could have made more from higher bids.
Moreover, the complaint said that Google and Facebook illegally collaborated to decrease prices paid to publishers, cut out rival ad networks and manipulate ad auctions operated by publishers. Sheryl Sandberg, the Chief Operating Officer at Facebook, in an email including CEO Mark Zuckerberg called the agreement a big deal strategically. Sandberg and Sundar Pichai, who is Google’s CEO, signed off on the deal’s terms. The states noted that Sandberg was previously a high-ranking executive in Google’s advertising business.
The complaint highlights that Google made the deal after Facebook announced an initiative that would help publishers and advertisers get around Google-imposed fees for advertising through its services. It has been alleged that Google feared a long-term threat to its ad server monopoly if enough buyers were able to bypass its fees. The complaint also quoted an internal Facebook document saying that partnering with Google would be relatively cheap compared to build and buy, and compete in zero-sum ad tech game. Furthermore, Google used a code name “Jedi Blue” for this arrangement. It referenced Facebook’s blue logo.
The states observed that Google took in the advertising space sought to illegally preserve its monopoly power. As such, it violated the Sherman Antitrust Act. A Google spokesperson, on Friday, said the company would file a motion to dismiss next week. Google said the case remains full of inaccuracies and lacks legal merit. The spokesperson called the states’ characterization of the Facebook arrangement inaccurate. “We sign hundreds of agreements every year that don’t require CEO approval, and this was no different.”