Sunday December 04, 2022

Google Denies Facebook Ad Collusion In Motion to Dismiss States’ Antitrust SuitGoogle Denies Facebook Ad Collusion in Motion to Dismiss States’ Antitrust Suit

Image: Loic Venance (Getty Images)

Google’s week of combative antitrust pushback came to a fitting conclusion on Friday with the company filing a motion to dismiss large parts of an antitrust case filed by Texas Attorney General Ken Paxton and a coalition of other states. Among other things, the new complaint filed last week accused Google of colluding with Facebook (now Meta) to give it an unfair leg up in Google’s programmatic ad auctions as part of a project oddly called “Jedi Blue.” Facebook, as part of the alleged quid pro quo, would agree to back down from its own ad plans. The complaint goes as far as to claim Google’s Sundar Pichai—and Meta’s Mark Zuckerberg and Sheryl Sandberg—all signed off on the agreement.

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That’s clearly not the way Google sees it. In the motion, Google claimed the states had failed to prove it had engaged in any anti-competitive behavior. Instead, the company described the examples lodged in the complaint as nothing more than a “collection of grievances.” Rather, if the states had their way, Google alleges, then the search giant would be forced to, “share with its competitors the fruits of its investments and innovation.” Google went on to argue some of the alleged conduct cited by states ended years ago, making the claims irrelevant.

“State Plaintiffs’ complaint—cheered on by a handful of Google’s rivals who have failed to invest properly, compete successfully, or innovate consistently—might serve the narrow interests of those rivals,” Google wrote in the motion. “But it also threatens to stifle the dynamism that drives Google and other firms to deliver the products on which businesses and consumers depend every day.”

Adam Cohen, Google’s Director of Economic Policy, released an accompanying blog post providing more details on the company’s decision to file the motion. In it, Cohen accused Paxton in particular of making “inaccurate and inflammatory allegations,” that misrepresent Google’s business, products, and motives. Cohen refuted a handful of the claims made in Paxton’s complaint, notably including those surrounding alleged collusion with Facebook.

Google says it publicly announced Facebook Audience Network’s (FAN) participation in its Open Bidding program, (alongside at least 25 other partners) back in 2018. Rather than being anti-competitive, Google argued Facebook’s participation in these auctions was actually beneficial to both advertisers and publishers.

“In fact,” Cohen wrote, “If FAN weren’t a part of Open Bidding, AG Paxton may have claimed we were preventing a rival from accessing our products and depriving publishers of additional revenue.”

Finally, Cohen reiterated Google’s view that it didn’t provide Facebook with an advantage over other bidding competitors, “FAN [Facebook] competes in the auction just like other bidders.”

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As hinted at above, Google’s motion comes during a week of vigorous lobbying against other legislative antitrust efforts trudging their way through Congress. Google took particular issue with the American Innovation and Choice Online Act, which if passed would make it illegal for tech’s largest internet companies to unfairly favor their own products and services on their platforms. In some cases, Google CEO Sundar Pichai reportedly personally contacted multiple lawmakers urging them to oppose the legislation. In the end, those efforts fell short. On Thursday, the Senate Judiciary Committee voted overwhelmingly (16-6) in favor of advancing the legislation.

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Image: Loic Venance (Getty Images).

Google’s week-long antitrust battle came to an end on Friday when the company filed a motion to dismiss large portions of an antitrust case brought by Ken Paxton, Texas Attorney General, and a coalition from other states. The new complaint last week alleges that Google colluded with Meta (now Facebook) to give it an unfair advantage in Google’s programmatic advertising auctions. This was part of a project called “Jedi Blue.” Facebook would, as part the alleged quid proquo, agree to rescind its own ad plans. The complaint claims that Sundar Pichai, Meta’s Mark Zuckerberg, and Sheryl Sandberg all signed off on the agreement.

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Google clearly sees it differently. Google claimed that the states failed to prove it engaged in anti-competitive behaviour. Instead, Google described the examples in the complaint as a “collection grievances”. If the states had their way, Google claimed, Google would have to “share with its rivals the fruits of its investments, innovation.” Google continued to argue that some of the alleged conduct cited years ago, making these claims irrelevant.
Google stated in the motion that the State Plaintiffs’ complaint, which was cheated on by a few Google’s competitors who have failed to invest properly or compete successfully, might serve the narrow interests these rivals. It also threatens to stifle Google’s dynamism to deliver the products that consumers and businesses depend on every day.

Adam Cohen, Google’s Director for Economic Policy, published a blog post that provides more information about the company’s decision. Cohen said that Paxton made “inaccurate, inflammatory allegations” that misrepresented Google’s business, products and motives. Cohen refuted some of the claims in Paxton’s complaint. This included those relating to alleged collusion between Facebook and Cohen.
Google claims it publicly announced Facebook Audience Network (FAN’s) participation in the Open Bidding program in 2018 (along with at least 25 other partners). Google claimed that Facebook’s participation was not anti-competitive but actually helped both publishers and advertisers.

Cohen wrote that “In fact,” Cohen said, “If FAN were not part of Open Bidding AG Paxton might have claimed that we were preventing a competitor from accessing our products, and depriving publishers additional revenue.”
Cohen reiterated Google’s view that it did not give Facebook an advantage over other bidding rivals. “FAN [Facebook] competes at the auction just as other bidders.”

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As we have already mentioned, Google’s motion was made during a week-long period of intense lobbying against other antitrust legislative efforts that were advancing through Congress. Google was particularly critical of the American Innovation and Choice Online Act. If passed, it would make it illegal for the largest internet companies to unfairly favour their products and services on their platforms. Sundar Pichai, Google CEO, reportedly personally contacted several lawmakers to oppose the legislation in some cases. These efforts failed to materialize. The Senate Judiciary Committee voted unanimously (16 to 6) in favor of moving the legislation.
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