Alphabet CEO Sundar Pichai makes gestures during a session at the annual meeting of the World Economic Forum (WEF) in Davos on January 22, 2020.
(Photo by Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI / AFP via Getty Images)
On Sunday, Google disputed allegations by a group of attorneys general, led by Ken Paxton of Texas, that its agreement to buy ads with Facebook was anti-competitive.
In a blog post, Adam Cohen, Google’s director of economic policy, called the 10-state Republican-led process “misleading.” The statement is Google’s most comprehensive response to the lawsuit, which is also the only one that calls Facebook a “co-conspirator” (though it doesn’t call Facebook a defendant). The company faces two other complaints from a bipartisan group of attorneys general and the Department of Justice.
The statement was followed earlier on Sunday by an article in the New York Times, which described more details about the alleged arrangement, citing an unwritten draft of the complaint. The Wall Street Journal previously reported on the unwritten project in December.
According to that version of the complaint described by the Times, a Google executive saw an “existential threat” in the 2017 Facebook announcement that it was testing a move in advertising space. Facebook was considering a headline bidding project at the time, a form of ad buying that allows publishers to circumvent their reliance on Google platforms.
But that project ended when the two reached an agreement in 2018 for Facebook to become a partner in the Google Open Bidding project, which allows exchanges of competing ads with its own, but takes a toll on the winning bids. The agreement was no different from that offered to the alliance partners, according to members interviewed by the Times who refused to be identified for fear of jeopardizing their relationship with Google.
Google allegedly gave Facebook more time to bid on ads than other members of the alliance, according to documents and interviews presented by the Times. Google also allegedly provided Facebook with more information about who would be at the end of receiving ads and a guaranteed “winning rate” for bids, the Times reported. The two agreed to “cooperate and help” each other if the agreement was investigated for competition reasons, the documents show.
In a blog post responding to the allegations, Cohen defended open bidding as a tool that benefits publishers. Cohen wrote that Open Bidding addresses some of the issues related to header bidding, such as slow-loading pages, and that header bidding is still a growing market, citing a 2019 eMarketer report.
Cohen noted that Google’s agreement with Facebook was widely reported at the time and said it simply allows Facebook and advertisers to participate in Open Bidding.
“We absolutely do not,” he manipulates auctions in favor of Facebook, Cohen wrote. The deal does not prevent Facebook from tracking the auction of the header and still requires the company and its advertising network to make the biggest bid to win, Cohen wrote. He also said that Google’s fees for advertisers are lower than the industry average and said there is a lot of competition in the space.
“Such partnerships are common in the industry and we have similar agreements with several other companies,” a Facebook spokesman said in a statement. “Facebook continues to invest in these partnerships and create new ones, which help increase competition in advertising auctions to create the best results for advertisers and publishers. Any suggestion that these types of agreements harm competition is lacking. foundation. “
A day after the Texas-led group filed a lawsuit against Google, a bipartisan coalition of 38 states and territories sued Google for another set of antitrust concerns, including alleged exclusionary contracts and discriminatory behavior toward competitors. on search results pages. The Justice Department and a group of Republican-led states have earlier sued Google for some of the same contract concerns.
Facebook faces separate complaints from the Federal Trade Commission and attorneys general from 48 states and territories that claim to have violated antitrust law.
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