This is the “free market” we always hear about.
An amended version of a lawsuit filed in December of 2020 by multiple states accuses the CEOs of Facebook and Google of being direct participants in what the suit says is an illegal agreement to corner the digital advertising market.
The lawsuit has claimed that Google and Facebook acted to throttle competition.
The lawsuit claims the tech giants agreed to decrease prices paid to publishers, cut out rivals and manipulate ad auctions, according to CNBC.
“Google understood the severity of the threat to its position if Facebook were to enter the market and support header bidding,” the complaint reads, according to MarketWatch. “To diffuse this threat, Google made overtures to Facebook.”
When the initial complaint was made public, the outlines of the allegations were complete, but the text of the lawsuit was heavily redacted.
The amended version was less so upon a judge’s order, allowing Americans to see that the coalition of states led by Texas Attorney General Ken Paxton targets top tech officials in its case against the tech giants. Existing redactions black out names, but not titles.
Thus by following the titles, CNBC would learn that Facebook Chief Operating Officer Sheryl Sandberg, called the agreement “a big deal strategically” in an email that included CEO Mark Zuckerberg, whose name was also redacted. Sandberg and Google CEO Sundar Pichai both OK’d the terms, CNBC reported.
The New York Post, citing the lawsuit, reported that Zuckerberg and Pichai “signed off on the backroom deal in 2018, which allegedly guaranteed Meta subsidiary Facebook would both bid in — and win — a fixed percentage of ad auctions.”
“Facebook CEO [REDACTED] wanted to meet with COO [REDACTED] and his other executives before making a decision,” says the complaint, meaning Zuckerberg and Sandberg.
“We’re nearly ready to sign and need your approval to move forward,” Sandberg wrote Zuckerberg.
“Google CEO Sundar Pichai also personally signed off on the terms of the deal,” the lawsuit said, according to the Post.
The tech giants said they did nothing wrong.
“Despite Attorney General Paxton’s three attempts to re-write his complaint, it is still full of inaccuracies and lacks legal merit,” Google spokesperson Peter Schottenfels said.
“Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world. There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers.”
Meta Platforms, Inc., the parent of Facebook, likewise defended itself.
“Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms have helped to increase competition for ad placements,” Meta spokesperson Christopher Sgro said.
“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all,” he said.
The lawsuit, led by Texas, has been joined by the attorneys general of Alaska, Arkansas, Florida, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nevada, North Dakota, Puerto Rico, South Carolina, South Dakota and Utah.