What you need to know
- Facebook and Google are both facing their own separate antitrust allegations.
- Documents uncovered a pact between the companies referencing a deal to giving Facebook exclusive access and advantages in Google's advertising tools.
- Terms of the deal seem to indicate that the companies were aware that their actions would lead to antitrust allegations, and that they would help each other if it did.
Both Facebook and Google are already busy enough with their own antitrust allegations that the last thing they both need is something else to add to the mix. Alas, the latest development in the of the two giants comes in the form of uncovered documents that refer to a pact between the two companies to provide each other with ad-related advantages and to aid each other if and when any antitrust claims are targeted at the deal.
The ongoing antitrust allegations against Google claim the company has held an illegal monopoly over search due to its anti-competitive practices on advertising. As it relates to Facebook, the 2018 deal in question, codename "Jedi Blue", provides the social network additional information and advantages in Google's ad auctions in exchange for Facebook not competing with the company's advertising tools. According to the Wall Street Journal, the companies agreed to "cooperate and assist each other in responding to any Antitrust Action" and to "promptly and fully inform the Other Party of any Governmental Communication Related to the Agreement."
"Any allegation that this harms competition or any suggestion of misconduct on the part of Facebook is baseless."
A spokesperson from Google informed that that claims of any auction manipulation are inaccurate. "There's nothing exclusive about [Facebook's] involvement and they don't receive data that is not similarly made available to other buyers." Facebook also denied any wrongdoing, calling the allegations "baseless". The lawsuit further claims that Google's concern about competition led the company to strike the deal with Facebook, with internal Google documents stating that if the two companies could not avoid competing with each other, they would collaborate to protect each others' interests and "build a moat".
Google faces a growing legal battle for its anticompetitive ad practices, which highlight deals such as this or paying Apple billions to make its search engine the default on its devices in addition to many of the best Android phones already running Google's operating system. Our Google antitrust faq page has a breakdown of the initial DOJ lawsuit. A total of 38 attorney generals accuse Google of market manipulation to hold its control over ads on its search engine, which Google has responded to, saying that it competes with a number of online ad companies and that the calls to change the way it handles its search engine would harm not only consumers but also businesses.
Facebook also has its own antitrust allegations of a similar matter, with claims of anticompetitive practices by buying up any company that may have posed a threat to its market position. This includes both Instagram and WhatsApp, and the lawsuits call for the social network to relinquish ownership of both.
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