Sundar Pichai, CEO of the Alphabet, announces during a session at the World Economic Forum (WEF) annual meeting in Davos, on 22 January 2020.
(Photo by Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI / AFP via Getty Images)
Google on Sunday disputed claims by a group of attorneys general led by Ken Paxton, Texas, that arranging advertising purchases with Facebook is competitive.
In a blog post, Google’s director of economic policy, Adam Cohen, called the lawsuit filed by Republicans led by Republicans “misleading”. The statement is Google’s most extensive response to the lawsuit to date, which is also the only one calling Facebook a ‘conspirator’ (though Facebook does not name a defendant). The company faces two other complaints from a two-party group of attorneys general and from the Department of Justice.
The statement follows a New York Times article earlier on Sunday describing more details about the alleged arrangement, referring to an indefinite draft of the complaint. The Wall Street Journal reported on the unedited draft earlier in December.
According to the version of the complaint, as described by the Times, a Google executive saw an ‘existential threat’ in Facebook’s 2017 announcement that it was testing the move to the advertising space. At the time, Facebook was considering a project to provide headlines, a form of ad buying that would allow publishers to work around dependence on Google’s platforms.
But the project came to an end when the two reached an agreement with Facebook in 2018 to become a partner in Google’s Open Bidding project, which allows competitive ad exchanges in addition to its own, but charges a fee to win the bid. The deal was different from others offered to partners in the alliance, according to members interviewed by the Times and who refused to be identified for fear they would jeopardize their relationship with Google.
According to the documents and interviews offered by the Times, Google apparently offered more time to offer ads than other members of the alliance. Google apparently also gave Facebook more insight into who would be on the receiving end of ads and a guaranteed ‘profit rate’ for bidding, reports Times. The documents showed that the two had agreed to ‘work together and help’ in the event that the agreement was investigated due to competition.
In the blog post that responds to the allegations, Cohen defends Open Bidding as a tool that benefits publishers. Cohen wrote that Open Bidding addresses some of the issues with providing headlines, such as pages that load slowly, and that headlines are still a growing market, citing a 2019 eMarketer report.
Cohen noted that at the time, Google’s agreement with Facebook was widely reported, saying it merely allowed Facebook and its advertisers to participate in Open Bidding.
“We absolutely do not,” manipulating auctions in favor of Facebook, Cohen wrote. The deal does not prevent Facebook from bidding and still requires the company and its advertising network to make the highest bid to win, Cohen wrote. He also said that Google’s fees for advertisers are lower than the industry average and said that there is a lot of competition in the space.
“Such a partnership is common in the industry, and we have similar agreements with several other companies,” a Facebook spokesman said in a statement. “Facebook continues to invest in these partnerships and create new partnerships that can help increase competition in advertising auctions to create the best results for advertisers and publishers. Any suggestion that these types of agreements harm competition is unfounded.”
A day after the Texas-led group filed a lawsuit against Google, a bipartisan coalition of 38 states and territories sued Google over another set of antitrust issues, including alleged exclusion contracts and discriminatory behavior against competitors on its search results pages. The Department of Justice and a group of Republican-led states have earlier sued Google over some of the same concerns over contracts.
Facebook is facing separate charges from the Federal Trade Commission and attorneys general of 48 states and territories alleging violating antitrust law.
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