Judge dismisses claims Facebook, Google had secret digital advertising pact

Judge dismisses claims Facebook, Google had secret digital advertising pact

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A federal judge in the US has cleared Facebook and Google of collusion in relation to an online marketing deal between the two companies, while allowing the ongoing antitrust case against the latter to continue. 

As reported by The Verge (opens in new tab), Judge P. Kevin Castel claimed the “Jedi Blue” deal (opens in new tab) broke no laws because of “Facebook’s motivation to use its economic clout as an advertising to drive the hardest bargain it could, and that Google was motivated by the legitimate, pro-competitive desire to obtain as much business as possible from Facebook.”

The agreement involved Facebook avoiding “header bidding”, a practice that allows companies to run their own auctions for ad space, in return for higher placement in Google’s own advertising listings. 

But in simple terms, the pact was not considered collusion because both companies were seen to have acted in their own separate interests.

Google’s antitrust woes

Although both companies have been cleared of legal wrongdoing, the renewed spotlight on the Jedi Blue deal – first brought to light via another antitrust lawsuit filed against Google by a number of US states in 2020 – has highlighted the control that a small number of large tech companies have over online content advertising.

In an online blog post (opens in new tab), Google claimed that the dismissal of accusations of collusion around the Jedi Blue deal proved that this latest antitrust case, led by Texas Attorney General Ken Paxton, is “deeply flawed”. It also claimed that “much” of the case has now been ruled in its favor.

However, the tech giant isn’t in the clear just yet. Judge Castel’s ruling (opens in new tab) deferred Google’s claim for dismissal –  on the grounds that the states that filed the case waited too long to do so- until later in the proceedings. He also wrote that the states have “plausibly alleged” that a number of Google’s practices within its operation of ad servers and ad exchanges are anti-competitive.

One of these practices was Google’s secret operation of “Project Bernanke” (opens in new tab), a program that generated hundreds of million dollars in revenue for Google over several years by using previous bid data from the company’s ad exchanges to give itself an advantage over competitors, making it easier for Google to win bids at ad auctions.

Google is no stranger to antitrust lawsuits, either. The US Department of Justice filed an antitrust case against the company in 2020, and is reportedly looking to file again after building the case over a number of years that Google’s parent company Alphabet Inc. has monopolized the field of digital content marketing (via Bloomberg (opens in new tab)). 

In its first complaint, the DOJ wrote that “American consumers are forced to accept Google’s policies, privacy  practices, and use of personal data; and new companies with innovative business models cannot emerge from Google’s long shadow.”

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luke.hughes@futurenet.com (Luke Hughes)

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