Texas Accuses Google and Facebook of an Illegal Conspiracy

Gilad Edelman, writing for Wired:

A lawsuit filed today by a coalition of state attorneys general, led by Texas’ Ken Paxton, accuses Google of making an “unlawful agreement” that gave Facebook special privileges in exchange for promising not to support a competing ad system. […]

As described in the complaint, the scheme between Google and Facebook has its roots in 2017, when Facebook announced it would start supporting something called “header bidding.” The details are too wonky to get into here. Basically, Google, which runs the biggest online ad exchange, likes to make publishers give it first dibs on bidding to place an ad. (“Publisher” just means any website or app that runs ads.) Header bidding was a technical hack that allowed publishers to earn higher prices by soliciting bids from multiple exchanges at once. Google hated this, because it created more competition. When Facebook declared that it would work with publishers that used header bidding, it was seen as a provocation. The millions of businesses that advertise with Facebook don’t just advertise on Facebook; through the Facebook Audience Network, the company also places ads across the web, making it one of the biggest ad buyers on the internet. If it began supporting header bidding, that could cause Google’s ad platform to lose a lot of business.

Drawing on internal documents uncovered during its investigation, however, the Texas attorney general claims that Facebook’s leaders didn’t actually want to compete with Google; they wanted Google to buy them off. This seems to have worked. In September 2018, the companies cut a deal.

Good write-up that cuts to the chase.

★ Thursday, 17 December 2020