Facebook Google secret deal
Facebook was going to compete for some advertising sales with Google but backed away from the plan after, according to court documents, the companies cut a secret deal. A deal that Facebook and Google reportedly settled reduced ad competition between the two businesses. A set of documents obtained from a Texas antitrust lawsuit explaining a “sweetheart deal” Google gave back in 2018 to Facebook revealed this.
Facebook announced in a Dec. 2018 blog post that it had entered Google’s program in one line. However, according to the draught lawsuit, it did not report that Google supplied Facebook with unique details and speed advantages to help the company compete in the auctions it did not sell to other partners, including a guaranteed “win rate.”
Google promised to help Facebook understand more who the advertisements will show by assisting the company in classify 80% of smartphone users and 60% of web users, the documents said. Yet, some other partners said they had no support to grasp who was showing commercials. Perhaps the most severe argument of the draught lawsuit was that the two firms had predetermined that Facebook would earn a fixed proportion of the auctions they were betting on.
“Unknown to other market participants, no matter how high others might bid, the parties have agreed that a certain number of times the gavel will come down in favor of Facebook,” the draught lawsuit said. Much as its other exchange and ad network partners, a Google spokeswoman said Facebook would make the highest bid to win an auction. While both firms claimed that the contract is not an antitrust issue, they included a provision for the parties to “cooperate and assist” each other if they are prosecuted for the partnership’s competition issues.