Google and Facebook struck deal, Texas states allege

Google and Facebook struck deal, Texas states allege

According to an amended antitrust complaint filed by Texas and 15 other states against Google, the chief executives of Alphabet s Google and Facebook were aware of a deal to add up part of the online advertising market.

The deal with Facebook, which Google called Jedi Blue, was signed off by Google Chief Executive Sundar Pichai, while Facebook CEO Mark Zuckerberg was talking about it on an email thread, they said in their third amended complaint.

Google said the complaint isn't accurate, and that the complaint itself is full of inaccuracies. We intend to file a motion to dismiss next week, a Google spokeswoman said.

Facebook, which has become Meta Platforms Inc., said in a statement that the deal was not exclusive to Google, and that other agreements have increased competition for ads placements. It said it was better for advertisers while compensated publishers. Facebook has not been named as a defendant in the lawsuit.

The deal was alleged to be part of Google's effort to counter header bidding, which publishers wanted to make more money from advertising placed on their websites, the filing said.

Google quickly realized that this innovation had a significant impact on its exchange's ability to demand a very large — 19 to 22 percent — cut on all advertising transactions, the filing said.

The filing said that the company's efforts to kill header bidding included striking a deal with Facebook, which had supported header bidding.

The complaint said that Google and Facebook struck a deal at the highest levels. Following the agreement, Facebook curtailed its involvement with header bidding in exchange for Google giving Facebook information, speed, and other advantages. The filing said that the two online platforms agreed on how often Facebook would win the publishers' auctions as part of the agreement.

Google had other tactics, including using at least three programs to manipulate ads, to coerce advertisers and publishers into using Google's tools, the filing said.

In 2020, a lawsuit filed by other states alleges that Google used coercive tactics and broke antitrust law in its efforts to boost its already dominant advertising business.

The document that was filed on Friday is a less redacted version of a second amended complaint that was originally filed in October 2021.

The lawsuit was one of several that resulted from investigations by the federal government and groups of states into online platforms.