Search engine giant Google and the renowned social media site Facebook allegedly made a pact to manipulate online advertising spaces to boost their market power wrongfully.
An antitrust lawsuit filed by Texas and nine other states against Google on Wednesday proclaims that the two parties did this to hold a stronger position in the profitable digital advertising marketplace. The case stated that Google played a major role in buying and selling display ads over the web. It further mentioned that both the parties accorded in a publicised deal in 2018 to allow Facebook’s advertiser clients to place ads within Google’s network of publishing partners. Google signed similar deals with other advertising companies to maintain a market share codenamed Project Jedi, said a source with direct knowledge on the issue.
The complaint went ahead to allege that Facebook agreed to withdraw from supporting competing software, which publishers had developed to hamper Google’s market power. “Facebook decided to dangle the threat of competition in Google’s face and then cut a deal to manipulate the auction,” the complaint said, stating internal talks. It led to Facebook receiving numerous benefits like access to Google’s data and policy exceptions that allowed its clients to unjustly get more ads placed than clients of other Google partners, as alleged by the states. However, Google spokesman Peter Schottenfels said the states’ allegations were incorrect and that Facebook did not receive special data.
The lawsuit also alleged that the two engaged in deciding the prices of ads and continued to cooperate. Although this section was majorly edited and left unclear as to how and when the companies allegedly used their “market allocation agreement”. However, it said that noting the level of cooperation between the two, Google and Facebook were aware that their agreement could trigger antitrust violations. No accusations of wrongdoing were put forward by states against Facebook. The US Department of Justice has stepped into the antitrust probe. Nonetheless, the Justice Department that sued Google of separate conduct in October, is awaited to mark any allegations related to the 2018 deal.