Facebook and Google reportedly settled a deal that reduced ad competitionbetween the two companies. This was revealed by a set of documents obtainedfrom a Texas antitrust lawsuit explaining a “sweetheart deal” Google gaveto Facebook back in 2018.
The deal was nicknamed “Jedi Blue” and it gave Facebook a favor in adheader bidding, where websites could get ad space from multiple exchangesat once. In return, Facebook would back Google’s Open Bidding approach tosell those ads, thereby reducing competition for both.
As a result, Facebook had more time to bid for ads, direct dealings withwebsites hosting ads, and Google’s aid in understanding ad audiences. Thesocial network giant agreed to bid more than 90% of the ad auctions when itcould identify users and also promised to spend a minimum of $500 millionper year.
Facebook also requested Google to avoid using ad info to manipulate adauctions in its favor.
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Both companies rejected accusations that Jedi Blue was anti-competitive. AFacebook spokesperson said that such deals help Google increase adcompetition and the arguments against it were “baseless”. Whereas a Googlespokesperson said that the Texas lawsuit “misrepresents” the deal and otheraspects of its ad business.
This won’t necessarily sway regulators as there is enough evidencesuggesting the two companies were fully aware of the potential scrutiny. Atthis point, it wouldn’t be surprising to see more regulatory action againstthe two companies once again.
