Report: Google and Facebook Colluded on Online Advertising
- Paul Thurrott
- Dec 22, 2020
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The Wall Street Journal has viewed an unredacted version of a 10-state antitrust lawsuit against Google and uncovered some unsettling new details. Key among them: Google and Facebook colluded in 2018 to together dominate the online advertising market.
The original suit cites internal company documents that were heavily redacted, the publication notes. But the unredacted version alleges that the two companies agreed in September 2018 to not compete with each other in online advertising, effectively splitting the market. According to the most recent data I could find, Google currently owns about 31.1 percent of the online advertising market, with Facebook sopping up 20.2 percent. The remaining 50 percent-ish of the market is split between dozens of smaller players, the biggest of which, Alibaba, has just an 8.8 percent share.
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The report says that Google used terminology from the Star Wars movies to describe the deal, with the codename for the deal named “Jedi Blue.” Under the terms of the deal, Facebook agreed that it would not compete with Google’s online advertising tools, but that it would in return get special treatment when it used them. The two firms also discussed how they would respond to the inevitable antitrust investigations.
“[The two firms will] cooperate and assist each other in responding to any Antitrust Action,” the unredacted version of the suit explains, and “promptly and fully inform the Other Party of any Governmental Communication Related to the Agreement.”
Google has already denied the allegation.
“We don’t manipulate the [ad] auction,” a Google spokesperson said. “There’s nothing exclusive about [Facebook’s] involvement and they don’t receive data that is not similarly made available to other buyers.”
“Any allegation that this harms competition or any suggestion of misconduct on the part of Facebook is baseless,” a Facebook spokesperson added.
Internally, however, Facebook CEO Mark Zuckerberg told executives that the agreement was “a big deal strategically.”
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