US states allege Facebook and Google CEOs oversaw illegal deal

Advertising technology giants Google and Meta reiterated their denials about anti-competitive cooperation, following an amended antitrust complaint lodged in the US late last week.

Google is the subject of the complaint, and neither Facebook nor its owner Meta are listed as defendants.

The states, led by Texas claim the deal was personally overseen by Sundar Pichai and Mark Zuckerberg (the respective CEOs of Google and Meta) and signed on behalf of Meta by COO Sheryl Sandberg.

The deal from 2018 allegedly lowered monies paid to publishers, hurt and excluded rival ad networks and manipulated prices.

The States alleged that Google used the $230 million scheme generated to boost bids in other parts of its online marketplace to ensure that customers using its tools won the auctions.

According to the lawsuit, "The preceding gTrade programs represent an illustrative but incomplete sample of the sophisticated auction programs Google uses to exclude competition in the exchange and ad buying tool markets."

While the facts in this case remain in dispute — Google says it will file a motion this week to have the case struck out — the technology sector and Google, in particular, has form on this front.

Famously in 2015, Google, along with Apple, Intel and Adobe, was subject to a file of $US415 after being found guilty of wage-fixing. Companies such as LucasFilms, Pixar and Intuit were also caught up in the scam, although Facebook rejected an invitation to dance, according to media reports at the time.

The new allegations are part of an antitrust action brought by 16 states and Puerto Rico which accuses Google of violating the Shermin Antitrust Act.

Not being evil

Google's director of economic policy Adam Cohen criticised Texas attorney General Ken Paxton, writing in a blog today, that he, "...tries to paint Google’s involvement in this industry as nefarious. The opposite is true. Unlike some B2B companies in this space, a consumer internet company like Google has an incentive to maintain a positive user experience and a sustainable internet that works for all—consumers, advertisers and publishers."

The blog outlines and attempts to debunk what Cohen describes as a series of myths starting with Google "dominates the online advertising landscape for image-based web display ads.”

In depends of course on your definition of domination.

Industry publisher and research Emarketer says Google' and Facebook's combined digital ad revenues in 2021 were 65 per cent. Each is expected to lose some market share this year as Amazon continues its rise as a digital ad powerhouse. By the end of next year Amazon is expected to have garnered close to 15 per cent market share.