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Paul Merrell

Google, Facebook made secret deal to divvy up market, Texas alleges - POLITICO - 1 views

www.politico.com/...uppress-competition-ads-447315

Google Facebook antitrust-litigation

shared by Paul Merrell on 18 Dec 20 - No Cached
  • Google and Facebook, the No. 1 and No. 2 players in online advertising, made a secret illegal pact in 2018 to divide up the market for ads on websites and apps, according to an antitrust suit filed Wednesday against the search giant. The suit — filed by Texas and eight other states — alleges that the companies colluded to fix prices and divvy up the market for mobile advertising between them.
  • The allegation that Google teamed up with Facebook to suppress competition mirrors a major claim in a separate antitrust suit the Justice Department filed against the company in October: that Google teamed up with Apple to help ensure the continued dominance of its search engine. Such allegations provide some of the strongest ammunition yet to advocates who argue that the U.S. major tech companies have gotten too big and are using their power — sometimes in conjunction with each other — to control markets.Many of the details about the Google-Facebook agreement, including its specific language, are redacted from the complaint. But the states say it “fixes prices and allocates markets between Google and Facebook as competing bidders in the auctions for publishers’ web display and in-app advertising inventory.”
  • The complaint alleges that the agreement was prompted by Facebook’s move in 2017 to use “header bidding” — a technology popular with website publishers that helped them increase the money they made from advertising. While Facebook sells ads on its own platform, it also operates a network to let advertisers offer ads on third-party apps and mobile websites.
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  • Google was concerned about the move to header bidding, the complaint alleges, because it posed an “existential threat” to its own advertising exchange and limited the ability of the search giant to use information from its ad-buying and selling tools to its advantage. Those tools let Google cherry pick the highest value advertising spots and ads, according to the complaint.Within months of Facebook’s announcement, Google approached it to open negotiations, the complaint alleged, and the two companies eventually cut a deal: Facebook would cut back on the use of header bidding and use Google’s ad server. In exchange, the complaint alleges that Google gave Facebook advantages in its auctions.
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