More evidence is emerging against Google in the antitrust lawsuit filed against the company by several states in the USA. According to documents attached to the file by the Texas attorney general's office, Google and Facebook they had a secret deal with rather "generous" terms that benefited Zuckerberg's company in buying online advertising.
Known by the code name “Jedi Blue” within Google, the agreement is related to a segment of the online advertising called “Programmatic Media”. When a user clicks on a link to a page, systems known as "Ad Exchanges" function as an auction house, offering the available advertising spaces. Ideally, the advertiser who makes the best offer is displayed to the user. Due to their dominance in the advertising market, companies were often targeted at Google's Exchange.
An existential threat
Over time, a new method for auctioning ads called “Header Bidding” was created. With it, pages could request offers for multiple Exchanges at once, which increased competition and led to better prices. According to the The new york times, one estimate points out that in 2016 more than 70% of content producers had already adopted the technology.
Seeing a potentially significant loss of business to Header Bidding, Google has developed an alternative called Open Bidding, which supports an alliance of Exchanges. But while the new system allows other companies to compete simultaneously with Google, Google receives a commission from each auction winner, and competitors say there is less transparency for publishers.
Google feared that Facebook would adopt Header Bidding, something it began testing in March 2017 with vehicles such as The Washington Post, Forbes and The Daily Mail. In an email attached to the lawsuit, a Google executive calls this possibility an "existential threat" that required "a hands-on approach on deck".
Secret deal made Facebook change sides
But in December 2018, Facebook announced discreetly on his blog that had joined Google and adopted Open Bidding. What the company did not say was that it received special treatment for this, with exclusive access to information, more time to bid and even a guaranteed "success rate".
According to executives from six of the 20 Open Bidding partners, who spoke to the The new york times on condition of anonymity, Facebook had 300 milliseconds to bid, while competitors were typically 160 milliseconds or less.
In addition, according to the documents attached to the lawsuit, Facebook had direct billing relationships with the sites where the ads would appear. For most other partners, Google controlled pricing information, effectively putting a barrier between them and website owners and hiding how much the winners of the bids ended up receiving.
Google agreed to help Facebook have a better understanding of who the ads would be shown to, helping the company identify 80% of mobile users and 60% of web users, the documents said. Several other partners said they had little help in understanding who the ads were being shown to.
According to the documents, Facebook promised to bid in at least 90% of the auctions when it could identify the end user and committed to spend a fixed amount - up to $ 500 million a year in the fourth year of the deal. Facebook also demanded that data about its bids not be used by Google to manipulate the auctions in its own favor, something that was not explicitly promised to other Open Bidding partners.
But the most serious claim is that companies predetermined that Facebook would win a fixed percentage of the auctions in which it participated. "Without the knowledge of other market participants, no matter how high the bids, the parties agreed that the hammer will fall in favor of Facebook a number of times," the document said.
A Google spokeswoman said Facebook must bid the highest to win an auction, just like its other partners. Both companies deny that the agreement is anti-competitive, but the terms include a clause that requires both to “cooperate and help each other”If they are investigated about your partnership.
"The word 'antitrust' is mentioned no less than 20 times in the agreement," says the complaint.
Source: The New York Times