Fresh charges directly name Sundar Pichai and Mark Zuckerberg, who “personally oversaw an illegal 2018 deal which advantaged Facebook on Google’s ad auctions.” A whole group of monopoly busting state prosecutors, led by Texas Attorney General Ken Paxton, teamed up on Friday to tackle the media megaliths by amending their antitrust complaint against Google.
Let’s make a deal
Google decided to play let’s make a high-dollar deal with Facebook in a conspiracy that left the American business sector stuck with a heard of goats. A revised lawsuit filed January 14 alleges that “Google manipulated its ad pricing tiers,” giving their secret scheme the codename “Project Bernanke.”
By using a shady method of removing “second-place bids on ad auctions,” Google pockets “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.”
The companies had a secret sweetheart deal and “illegally collaborated to decrease prices paid to publishers, cut out rival ad networks and manipulate ad auctions operated by publishers.” The thing about the new filing which surprises the beltway analysts is “just how far up the arrangement, alleged in earlier filings, went.”
All the way up to Facebook Chief Operating Officer Sheryl Sandberg. They ran a black magic marker over her name but everyone knows who the prosecutors were talking about.
Sandberg called the agreement “a big deal strategically” in an email. The email was to “CEO Mark Zuckerberg, whose name was also redacted.”
They soon got Google CEO Sundar Pichai to sign off on the terms. This “third amended lawsuit” points out that Sandberg “was previously a high-ranking executive in Google’s advertising business.”
Sidestep the fees
Google came up with the sneaky scheme “after Facebook announced a move that would help publishers and advertisers get around Google-imposed fees for advertising through its services.” They offered Zuckerberg the deal because “Google feared a long-term threat to its ad server monopoly if enough buyers were able to bypass its fees.”
The prosecutors quote an internal Facebook document which declares that cooperating with Google would be “relatively cheap compared to build/buy and compete in zero-sum ad tech game.”
Google came up with the custom tailored secret spy name “Jedi Blue” for the Facebook deal “referencing Facebook’s blue logo.”
Along with Texas, 16 states and Puerto Rico “alleged that this and other actions Google took in the online advertising space sought to illegally preserve its monopoly power, violating the Sherman Antitrust Act.” That’s a no-no.
As expected, the media giants are pushing back hard. They claim the deal isn’t really anything special. Meta’s spokesunit claims its “non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements.”
That, they insist enables “Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all.“
