Google rejects claim of anti-competitive deal with Facebook

On Sunday, Google disputed claims by a group of attorneys general, led by Ken Paxton of Texas, that its ad buying deal with Facebook was anti-competitive.

In a blog post, Google’s chief economic officer Adam Cohen called the 10-state Republican-led trial “deceptive.” This statement is Google’s fullest response to this lawsuit, which is also the only one to name Facebook as a “co-conspirator” (although it does not name Facebook as a defendant). The company faces two more complaints from a bipartisan group of attorneys general and the Department of Justice.

The statement followed a New York Times article earlier Sunday that described more details of the alleged arrangement, citing an unredacted draft of the complaint. The Wall Street Journal previously reported on the unredacted project in December.

According to this version of the complaint described by The Times, a Google executive saw an “existential threat” in Facebook’s 2017 announcement that it was testing a passage through the ad space. Facebook was considering a header auction project at the time, a form of ad buying that allowed publishers to bypass reliance on Google’s platforms.

But that project came to an end when the two reached an agreement in 2018 for Facebook to become a partner in Google’s Open Bidding project, which enables competing ad exchanges alongside its own, but takes fees for winning auctions. . The deal was different from others offered to alliance partners, according to members interviewed by The Times who declined to be identified for fear of endangering their relationship with Google.

Google has reportedly given Facebook more time to bid than other alliance members, according to documents and interviews presented by The Times. Google has also reportedly offered Facebook more information on ad recipients and a guaranteed “success rate” for the auctions, the Times reported. The two agreed to “cooperate and help each other” in the event the deal is investigated for competition concerns, the documents said.

In the blog post responding to the allegations, Cohen championed Open Bidding as a tool that benefits publishers. Cohen wrote that Open Bidding solves some of the problems with header auctions, like slow loading pages, and that header auctions are still a growing market, citing a 2019 eMarketer report.

Cohen noted that Google’s deal with Facebook was widely reported at the time and said it simply allowed Facebook and its advertisers to participate in Open Bidding.

“We’re absolutely not doing it,” manipulating the auction in favor of Facebook, Cohen wrote. The deal doesn’t stop Facebook from continuing the header auctions and still requires the company and its ad network to bid the highest to win, Cohen wrote. He also said that Google’s fees for advertisers were lower than the industry average and said there was a lot of competition in the space.

“Partnerships like this are common in the industry, and we have similar agreements with several other companies,” a Facebook spokesperson said in a statement. “Facebook continues to invest in and build new partnerships, which help increase competition in ad auctions to create the best results for advertisers and publishers. Any suggestion that these types of deals hurt to competition is unfounded. “

A day after the Texas-led group filed its lawsuit against Google, a bipartisan coalition of 38 states and territories sued Google over another set of antitrust concerns, including allegedly exclusionary contracts and discriminatory behavior in l against competitors on its search results pages. The Justice Department and a group of Republican-led states had previously sued Google over some of the same concerns about contracts.

Facebook separately faces complaints from the Federal Trade Commission and attorneys general of 48 states and territories, claiming it violated anti-monopoly law.

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