Google’s and Facebook’s top execs accused of fixing ads

The alleged 2017 deal between Google and Facebook to kill header bidding, a way for multiple ad exchanges to compete fairly in automated ad auctions, was negotiated by Facebook COO Sheryl Sandberg, and endorsed by both Facebook CEO Mark Zuckerberg (now with Meta) and Google CEO Sundar Pichai, according to an updated complaint filed in the Texas-led antitrust lawsuit against Google.

Texas, 14 other US states, and the Commonwealths of Kentucky and Puerto Rico accused Google of unlawfully monopolizing the online ad market and rigging ad auctions in a December, 2020, lawsuit. The plaintiffs subsequently filed an amendment complaint in October, 2021, that includes details previously redacted.

On Friday, Texas et al. filed a third amended complaint [PDF] that fills in more blanks and expands the allegations by 69 more pages.

The fortified filing adds additional information about previous revelations and extends the scope of concern to cover in-app advertising in greater detail.

Presently, there are three other US government-backed unfair competition claims against Google ongoing: a federal antitrust lawsuit from the US Justice Department, a challenge from Colorado and 38 other State Attorneys General (filed around the same time as the Texas-led complaint), as well as a competition claim focused on Android and the Google Play Store filed last July.

The third amendment complaint delves into more detail about how Google allegedly worked “to kill header bidding,”

[]…]

The deal, referred to as “Jedi Blue” internally and eventually as “Open Bidding” when discussed publicly, allegedly allowed Facebook to win ad auctions even when outbid by competitors.

The third amended complaint explains, “Facebook’s Chief Operating Officer [REDACTED] was explicit that ‘[t]his is a big deal strategically’ in an email thread that included Facebook CEO [REDACTED].

[…]

The expanded filing includes new allegations about how Google used Accelerated Mobile Pages to hinder header bidding.

Google first created Accelerated Mobile Pages (“AMP”), a framework for developing mobile webpages, and made AMP compatible with Google’s ad server but substantially hindered compatibility with header bidding. Specifically, Google made AMP unable to execute JavaScript in the header, which frustrated publishers’ use of header bidding.

[…]

What’s more, the revised filing adds support for the claim that a Google ad program called Dynamic Revenue Share or DRS cheated to help Google win more valuable ad impressions.

“DRS manipulated Google’s exchange fee after soliciting bids in the auction and after peeking at rival exchanges’ bids to win impressions it would have otherwise lost,” the revised complaint says.

And the complaint now contends that Google personnel admitted the unfairness of the DRS system: “Google internally acknowledged that DRS made its auction untruthful: ‘One known issue with the current DRS is that it makes the auction untruthful as we determine the AdX revshare after seeing buyers’ bids and use winner’s bid to price itself (first-pricing)….'”

[…]

Source: Google’s and Facebook’s top execs accused of fixing ads • The Register

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