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Google and Facebook ‘illegal transaction’ spotted

According to the latest antitrust lawsuit documents filed jointly by many states in the United States, Google CEO Sundar Pichai personally approved a deal with Facebook. The deal, which the state attorney general called an “illegal agreement,” was designed to manipulate the digital advertising market.

On Friday, a state coalition led by Texas Attorney General Ken Paxton filed a revised antitrust complaint against Google, revealing details of Pichai’s signing of the deal. The lawsuit, first filed in December 2020, accuses Google of abusing its power in its vast digital ecosystem of buying and selling online ads.

Google ‘kills’ competing for ad tools

At the heart of the case is a 2018 agreement between Google and Facebook, code-named “Jedi Blue” within Google because Facebook’s logo is blue. The agreement is designed to “kill” an advertising tool that has grown in popularity among publishers and is backed by Facebook, the complaint said.

The states allege that Google sees Facebook’s role as a competitive threat to the company’s lucrative advertising business. In an effort to get Facebook to ditch the alternative tool favored by publishers, it agreed to give the social media company an edge in an online ad auction conducted through Google’s own technology.

CEO ‘conspiracy’

According to the complaint, Pichai personally approved the terms of the agreement. Meanwhile, Facebook parent company Meta COO Sheryl Sandberg also approved the agreement.

Sandberg has described the deal with Google as “a major strategic deal” in an email exchange that included Meta CEO, Mark Zuckerberg. Meta executives told Zuckerberg they needed his approval to move forward with the deal.

Google, Facebook respond

Google said in a statement that the market in which its advertising business operates is highly competitive. “Attorney General Paxton’s complaint is full of inaccuracies and lacks legal basis,” Google said.

Meta was not named as a defendant in this case. The company said in a statement that the agreement with Google increases competition for ad space, benefiting publishers and advertisers.

(VIA)

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