Tech giants Facebook and Google allegedly had a pact to “cooperate and assist one another” if they were ever targeted for antitrust violations concerning their coordination in online advertising, an unredacted version of a lawsuit against Google alleges, according to The Wall Street Journal.
Last week, Texas Attorney General Ken Paxton announced the state’s suit against Google, accusing the tech giant of “maintaining an illegal monopoly in online advertising,” TechCrunch reported. “It isn’t fair that Google effectively eliminated its competition and crowned itself the head of online advertising,” Paxton argued.
Texas is joined by attorneys general from nine other states: Arkansas, Indiana, Kentucky, Missouri, Mississippi, South Dakota, North Dakota, Utah, and Idaho.
In an unredacted draft version of the suit, reviewed by the Journal, it’s alleged that Facebook and Google “cut a deal in September 2018 in which Facebook agreed not to compete with Google’s online advertising tools in return for special treatment when it used them,” the report outlined.
According to the suit, the tech giants “were aware that their agreement could trigger antitrust investigations and discussed how to deal with them,” the report added.
The unredacted draft version reveals more detail into the allegations. For example, the contract’s provisions apparently stated that the corporations would “cooperate and assist each other in responding to any Antitrust Action” and “promptly and fully inform the Other Party of any Governmental Communication Related to the Agreement.”
That contract, according to the unredacted draft, includes the word “antitrust” “no fewer than 20 times.”
It was Facebook Chief Operating Officer Sheryl Sandberg who apparently signed the deal with Google, the unredacted draft says, citing an email in which Sandberg tells CEO Mark Zuckerberg and other executives, “This is a big deal strategically.”
Both Google and Facebook have disputed the allegations.
The suit’s “claims are inaccurate. We don’t manipulate the auction,” a Google spokesperson said, according to the Journal, asserting that “the deal wasn’t secret and that Facebook participates in other ad auctions.”
“There’s nothing exclusive about [Facebook’s] involvement and they don’t receive data that is not similarly made available to other buyers,” the spokesperson added.
“Any allegation that this harms competition or any suggestion of misconduct on the part of Facebook is baseless,” a Facebook spokesperson retorted.
As reported by the Journal last week, the suit accuses Google “of running an illegal digital-advertising monopoly and enlisting rival Facebook Inc. in an alleged deal to rig ad auctions that was code-named after ‘Star Wars’ characters.” The apparent deal was allegedly dubbed “Jedi Blue.”
“The complaint, filed in U.S. District Court in Texas, alleges that Facebook emerged in 2017 as a powerful new rival to Google, challenging the Alphabet Inc. unit’s established dominance in online advertising,” the report explained. “Google responded by initiating an agreement in which Facebook would curtail its competitive moves, in return for guaranteed special treatment in Google-run ad auctions, the lawsuit claims.”