(Reuters) – Chief executives of Alphabet Inc.’s Google and Facebook were aware of a deal to carve up part of the internet marketing market, based on an amended antitrust complaint filed by Texas and 15 other states against Google.
The deal with Facebook, which Google dubbed “Jedi Blue,” was “signed off” by Google Chief Executive Sundar Pichai while Facebook CEO Mark Zuckerberg was with an email thread discussing it, i was told that in their third amended complaint.
Google said the complaint’s assertion “isn’t accurate,” which the complaint is “full of inaccuracies.”
“We intend to file a motion to dismiss in a few days,” a Google spokesperson said.
Facebook, that has since become Meta Platforms Inc., said in a statement the deal wasn't exclusive to Google, which other agreements have raised competition for ad placements. It said hello was better for advertisers “while fairly compensating publishers.”
Facebook has not been named like a defendant within the lawsuit.
The deal was allegedly struck as part of Google’s effort to counter header bidding, which publishers wanted to use to earn more money from advertising put on their websites, the filing said.
“Google quickly remarked that this innovation substantially threatened its exchange's capability to have to have a very large – 19 to 22 percent – cut on all advertising transactions,” the filing said.
Its efforts to kill header bidding included striking an offer with Facebook, which had supported header bidding, the filing said.
“Ultimately, Google and Facebook struck a deal executed at the highest levels,” the complaint said. “Following the agreement, Facebook curtailed its involvement with header bidding to acquire Google giving Facebook information, speed, and other advantages.”
As part of the agreement, the 2 online platforms decided on how frequently Facebook would win the publishers’ auctions, the filing said.
Google had other tactics also, for example using a minimum of three programs to manipulate ad auctions to coerce advertisers and publishers into using Google’s tools, the filing said.
The Texas lawsuit, which was joined by other states, was filed in 2022 and alleges that Google used coercive tactics and broke antitrust law in the efforts to boost its already-dominant advertising business.
The document filed on Friday is really a less redacted form of a second amended complaint, which was originally filed in October 2022.
The lawsuit was one of several that arose from investigations by the authorities and categories of states into online platforms.
