Google, Facebook alleged to have struck a deal to cut ad competition

Google, Facebook alleged to have struck a deal to cut ad competition

The New York Times has reportedly secured documents from a Texas’ antitrust lawsuit that effectively add more fuel to the antitrust cases piling up against Facebook and Google. The documents cite a 2018 ‘sweetheart deal’ that was given to Facebook by Google, allegedly decreasing ad competition.

Sources knowledgeable of the matter state that this deal, reportedly designated ‘Jedi Blue’, provided Facebook favors inside ad header bidding, whereby websites could ask for ad space bids from numerous exchanges at once, in return for supporting Google’s Open Bidding approach towards trading those ads.

However, Google and Facebook both have already discarded the idea that Jedi Blue was against competition.

According to a spokesman from Facebook, arguments with regards to the clashing are ‘baseless’ since transactions like that with Google would help in increasing the competition in ad bids. As opined by a Google spokesperson, Texas’ lawsuit offers the misrepresentation of the deal in addition to other aspects of the company’s ad business.

The terms of the deal have apparently given inherent advantages to Facebook, which had more time for initiating bids for advertisements, direct billing transactions with the websites hosting the ads, as well as for taking help from Google for understanding ad audiences.

Furthermore, under the agreement, Facebook would make bids on over 90 per cent of the ad auctions when it could recognize users, promising minimum spending levels of up to $500 million annually. The company had also asked Google to avoid the use of bid info for skewing ad auctions in the company’s favor, stated the agreement.

While Google’s other ad partners have stated that they have not obtained nearly as sweet a bargain, Texas’ complaint has effectively accused Google of putting rivals at a disadvantage by promising a fixed number of ad wins for Facebook.

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About the author

Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for, spanning the verticals of business, finance, and technology.