Google, Facebook have agreed to team up against a possible antitrust action, says the draft lawsuit

The lawsuit, as filed, cites internal company documents that were heavily drafted. The Wall Street Journal reviewed part of a recent, unedited version of the trial that explained the findings and allegations in the court documents.

Ten Texas-led Republican attorneys general say the two companies struck a deal in September 2018 in which Facebook agreed not to compete with Google’s online advertising tools in exchange for special treatment when it used them.

Google used the language of “Star Wars” as a code name for understanding, according to the process that drafted the real name. The preliminary version of the suit says she was known as the “Jedi Blue”.

The lawsuit itself said that Google and Facebook were aware that their agreement could trigger antitrust investigations and discussed how to approach them, in a passage that is followed by meaningful wordings.

The draft version specifies some of the provisions of the contract, which stipulate that companies “will cooperate and assist each other in responding to any antitrust action” and “will promptly and fully inform the other party of any government communication related to the agreement.”

In the company contract, “the word [REDACTED] it appears at least 20 times “, it is said in the process. The unwritten project completes the word: Antitrust.

A Google spokesman said such agreements on antitrust threats are extremely common. The spokesman also disputed allegations of the process of manipulating online advertising auctions, saying that Google does not offer Facebook any exclusive arrangements and does not provide the company with data that is not available to others.

The lawsuit filed last week does not mention Facebook’s chief operating officer, Sheryl Sandberg. According to the preliminary version, Ms. Sandberg signed the agreement with Google. The draft also quotes an email to CEO Mark Zuckerberg and other executives: “This is a strategic issue.”

Like Google, Facebook has challenged the allegations in the lawsuit, saying its advertising bidding agreements promote choice and create clear benefits for advertisers, publishers and small businesses.

“Any claim that this is detrimental to competition or any suggestion of misconduct by Facebook is unfounded,” a Facebook spokesman said.

The final version of the trial did not make public details about the value of the agreement. The project stipulates that, starting with the fourth year of the transaction, Facebook is blocked from spending at least $ 500 million annually on Google-led advertising auctions. “Facebook is going to win a fixed percentage of these auctions,” says the preliminary version. The lawsuit states that “Facebook is to [REDACTED]. ”

According to the preliminary version, an internal Facebook document described the business as “relatively cheap” compared to direct competition, while a Google presentation said that if the company could not “avoid competition with” Facebook, it would work to “build a ditch” . “The lawsuit filed last week does not include those citations.

The lawsuit alleges that Google executives worried before the deal about competition on Facebook, as well as others implementing “header bidding,” a technique for buying and selling ads online.

In an internal Google presentation in October 2016, an employee expressed concern about the potential for competition from Facebook and other large technology companies, saying, “Let’s stop these guys from doing HB [header bidding] we probably have to consider something more aggressive “, according to the project.

The drafted process discusses Google’s competition concerns and mentions the presentation, but does not include the citation.

According to an internal Google communication in November 2017, which discusses a potential “Facebook partnership” for Google’s “Top Partner Board,” Google said its final game was to “collaborate when necessary to maintain the status quo.” .. ”The written process describes a presentation about the final Google game, but does not include quotation marks.

As the two sides came to an agreement, according to the draft, the Facebook negotiating team sent an email to Mr. Zuckerberg, saying the company was faced with options: “invest hundreds more engineers” and spend billions of dollars to block inventory, leave business, or transact with Google. Mr Zuckerberg wanted to meet before making a decision, according to the draft.

These details do not appear in last week’s lawsuit, which calls Mr Zuckerberg only once, in a separate paragraph on another internal communication on the agreement.

For years, criticism of Google’s online advertising empire has focused on how the company has used its powerful consumer-oriented platforms, such as Google Search and YouTube, to take over another profitable business, but less visible: software that acts as an intermediary for buying and selling ads on the web.

The allegations on Facebook add a new wrinkle – that Google has reached a deal with a competing intermediary, one that states describe as “Google’s biggest potential competitive threat.”

They also pose a strong legal risk. Under US law, pricing agreements may be easier to prove than other state allegations – namely that Google maintains an illegal monopoly.

In addition to the lawsuit filed in Texas, Google was hit last week in a separate antitrust lawsuit that was joined by 38 attorneys general, who claimed to maintain its monopoly power over the Internet search market through contracts and anti-competitive conduct.

Google has also challenged the arguments in this lawsuit, as well as a previous lawsuit filed by the Justice Department on Oct. 20 over alleged monopoly practices.

Write to Ryan Tracy at [email protected] and John D. McKinnon at [email protected]

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