Facebook And Google CEOs Aware Of Formal Ad Market Deal – Court Filing

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WASHINGTON, Jan 14 (Reuters) – Google chief executives of Alphabet Inc. (GOOGL.O) and Facebook (FB.O) were aware of a deal to carve up part of the online advertising market , according to an amended lawsuit filed by Texas and other states that have filed antitrust suits against Google.

The deal with Facebook, which Google has dubbed “Jedi Blue”, was “signed off” by Google Chief Executive Sundar Pichai, while Facebook CEO Mark Zuckerberg was on a thread to discuss it, they said in their third amended complaint.

Google said the claim in the complaint “is not accurate” and that the complaint itself is “full of inaccuracies”.

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“We intend to file a motion to dismiss next week,” a Google spokesperson said.

Facebook, which has since become Meta Platforms Inc, said in a statement that the deal was not exclusive to Google and that other deals have increased competition for ad placements. He said it was better for advertisers “while compensating publishers fairly.”

Facebook was not named as a defendant in the lawsuit.

The deal was allegedly made as part of Google’s efforts to counter header auctions, which publishers wanted to use to make more money from advertising placed on their websites, according to the filing.

“Google quickly realized that this innovation posed a significant threat to its exchange’s ability to demand a very deep cut – 19-22% – on all ad transactions,” the filing said.

His efforts to kill header bidding included striking a deal with Facebook, which had taken over header bidding.

“Ultimately, Google and Facebook reached a top-level executed agreement,” the complaint states. “Following the deal, Facebook reduced its involvement in header auctions in exchange for Google giving Facebook information, speed and other benefits.”

As part of the deal, the two online platforms agreed on how often Facebook would win publishers’ auctions, according to the filing.

The Texas lawsuit, which has been joined by other states, was filed in 2020 and alleges that Google used coercive tactics and violated antitrust laws in its effort to boost its already dominant advertising business. Read more

The lawsuit was one of many that stemmed from investigations by the federal government and state groups on online platforms. Read more

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Reporting by Diane Bartz, Elizabeth Culliford and David Shepardson; edited by Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.


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