UPDATED 14:50 EDT / DECEMBER 22 2020


Report: Facebook and Google agreed to cooperate against antitrust action

Facebook Inc. and Google LLC signed an agreement to cooperate with one another to fend off potential antitrust action targeting their businesses, according to a Wall Street Journal report published today.

The report attributes the information to a draft copy of a lawsuit that was filed against Google last week by 10 Republican state attorneys general. 

The version of the lawsuit that was released to the public last week has multiple redacted sections. The draft copy obtained by the Journal, however, is said to contain some of those sections in an unredacted form. The new details revealed in the draft shed light on the agreement Facebook and Google reportedly inked to cooperate against antitrust action.

At the heart of the matter is that the two tech giants are being accused by the state attorneys general of working together to gain an unfair advantage in the online advertising market. Both companies operate ad exchanges, essentially auctions where marketers can buy ad inventory in websites and mobile apps. Facebook and Google allegedly struck a deal wherein the social network agreed to create less competition for Google in return for receiving preferential treatment on the search giant’s ad exchange.

Today’s report details that the deal was known as “Jedi Blue” internally. The agreement is said to include a provision that specifies Facebook and Google will “cooperate and assist each other in responding to any Antitrust Action.” Moreover, the companies reportedly pledged to “promptly and fully inform the Other Party of any Governmental Communication Related to the Agreement.”

The Journal report goes on to provide additional information on the exact way Facebook and Google are accused of unfairly collaborating in the online advertising market. The draft copy of the states’ lawsuit is said to charge that the companies’ deal locks Facebook into spending at least $500 million annually in Google-run ad auctions starting from the agreement’s fourth year. An internal Facebook document, meanwhile, reportedly described the deal as “relatively cheap” when compared with direct competition with Google.

The lawsuit reportedly also cites internal correspondence from Google. In one document, dated November 2017, the search giant said its goal is to “collaborate when necessary to maintain status quo.” Facebook and Google reportedly struck the ad exchange deal less than a year later, in September 2018. 

“Any allegation that this harms competition or any suggestion of misconduct on the part of Facebook is baseless,” a Facebook spokesperson said.

Google responded to the report as well. “The idea that this was a secret deal is just wrong,” a spokesperson said. “There’s nothing exclusive about their involvement and they don’t receive data that is not similarly made available to other buyers.”

Image: Pexels

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