Google this week was hit by a lawsuit from two Massachusetts companies accusing the search giant of cutting an illegal deal with Facebook that gave the social network unfair advantages in online advertising auctions.
The plaintiffs in the lawsuit, filed Tuesday in San Francisco, request class-action status for advertisers on Facebook who were “victimized” by the agreement.
The lawsuit references allegations first made in an antitrust complaint against Google filed last year by Texas Attorney General Ken Paxton and a group of nine other state AGs. At the time, the states alleged Google illegally teamed up with Facebook, its fiercest competitor in the digital advertising market, after Facebook threatened to go after Google’s dominance in the market by backing an ad-buying technique called “header bidding.” The practice, in part, can help publishers go around Google’s exchange for buying and selling ads across the web.
Google, concerned by Facebook’s moves in the ad market, allegedly reached out to Facebook to try to defuse the threat. In the end, Facebook backed off after Google agreed to give the social network “special information, a speed advantage to assist Facebook in succeeding in the auctions, and a guaranteed win rate,” according to Tuesday’s complaint.
“To sufficiently incentivize Facebook, Google and Facebook agreed to fix prices and allocate markets between them in the auctions for publishers’ web displays and in-app advertising,” the complaint says. “Given the scope and extensive nature of cooperation between Google and Facebook, they were highly aware that their activities could trigger antitrust violations.”
Reached for comment Wednesday, a Google spokesman pointed to a blog post the company published in January responding to the Texas lawsuit. In the post, Google called the lawsuit a “misleading attack on our ad tech business.”
Facebook declined to comment. Previously, the company had dismissed the allegations, saying “partnerships like this are common in the industry.”
The complaint comes as Google finds itself the target of multiple major antitrust lawsuits, including a complaint filed last month by a coalition of 36 states and the District of Columbia over allegedly anticompetitive practices at Google’s Play store, a marketplace for apps. The suit joins other cases designed to probe Google’s dominance in everything from online searches to the power of its Android operating system, the dominant mobile software in the world.Source: CNET