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Lawsuits & Litigation

Lawsuit: Facebook, Google Conspired to “Dominate” Digital Advertising

— January 14, 2022

While Google allegedly over-charged customers for its ad space, it allowed Facebook to “win” a guaranteed number of advertising auctions.

A coalition of state attorneys general have updated a lawsuit against Facebook and Google, accusing the technology companies of putting together a backroom deal giving Facebook an advantage in digital advertising auctions.

According to FOX News, attorneys general for Texas and other states say the agreement may have violated federal antitrust agreements by giving Facebook an advantage on Google’s advertising exchange.

In their complaint, prosecutors say that Facebook Chief Operating Officer Sheryl Sandberg negotiated a lucrative marketing deal with Google C.E. Sundar Pichai—all, apparently, without the oversight or approval of Facebook’s own C.E.O., Mark Zuckerberg.

Sandberg later referred to the agreement as “a big deal strategically.”

Google Search Screen
Google Search Screen; image courtesy of Simon via pixabay,

Now, the attorneys general say the deal is further evidence that Google has long since forsaken its motto, “Don’t Be Evil.”

“The halcyon days of Google’s youth are a distant memory. Over twenty years ago, two college students founded a company that forever changed the way that people search the internet,” the lawsuit states. “Since then, Google has expanded its business far beyond search and dropped its famous ‘don’t be evil’ motto. Its business practices reflect that change. As internal Google documents reveal, Google sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook, its largest potential competitive threat, to manipulate advertising auctions. The Supreme Court has warned that there are such things as antitrust evils. This litigation will establish that Google is guilty of such antitrust evils, and it seeks to ensure that Google won’t be evil anymore.”

The Guardian notes that the lawsuit was first filed in December 2020, but was recently amended to include the newly revealed documents. The lawsuit essentially alleges that Google maintained control over the advertising sales market—a market it already dominates—by artificially inflating the price of advertisements, then suppressing competition on other exchanges.

“Google pocketed the difference between what it told publishers and advertisers that an ad cost and used the pool of money to manipulate future auctions to expand its digital monopoly,” the lawsuit said.

Google’s agreement with Facebook allegedly assured that the social media company—recently rebranded as “Meta”—would always win a certain percentage of its advertising bids.

Both Google and Facebook have denied any wrongdoing.

“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all,” Facebook-Meta spokesperson Chris Sgro said in a statement.

Google, adds The Guardian, is facing a separate set of monopoly-related charges brought by the United States government.


Lawsuit claims Facebook and Google CEOs were aware of deal to control advertising sales

Lawsuit claims Google and Facebook brokered secret deal to dominate ad market

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