Google, Facebook CEOs were aware of deal to control ad sales: lawsuit
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Facebook and Google seem to be in quite the predicament as allegations of cornering the market are at an unprecedented height, and this lawsuit seems to prove the accusations they are facing.
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The CEOs of the two tech giants were allegedly involved in the manipulation of advertising sales.
Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai were aware of and approved a deal, which entails collaborating on potentially manipulating advertising sales, newly released documents revealed.
The documents came out on Friday, highlighting the CEOs' complicity in what a lawsuit is accusing them of - maintaining control over the advertising sales market by illegal means.
The documents were filed as part of the lawsuit brought by the attorneys general of several US states.
The lawsuit has been in action for over a year, and it claims Google misled publishers and advertisers about the price and process of ad auctions.
At the time of filing, various documents and parts of the lawsuit were redacted. However, court rulings have made them public since then.
The lawsuit says Google kept its chokehold on the advertising sales market by inflating the price of advertisements for brands and suppressing competition from other ad exchanges.
The Wall Street Journal says Google "pocketed the difference between what it told publishers and advertisers that an ad cost and used the pool of money to manipulate future auctions to expand its digital monopoly."
Concurrently, the documents cite internal correspondence proving that several Google employees said certain practices amounted to growing the tech giant's business through "insider information."
The lawsuit additionally says Facebook and Google executives signed off on a deal to assure that Meta would bid on - and win - a certain percentage of ads.
Facebook COO Sheryl Sandberg was "explicit that 'this is a big deal strategically'" in emails sent out in 2018 regarding the deal that included Facebook CEO Mark Zuckerberg, the lawsuit claims.
The agreement between the two tech giants was signed by Google Chief Business Officer Philipp Schindler and Facebook Chief Operating Officer Sheryl Sandberg.
State attorneys have argued it was an illegal agreement that included price-fixing, while Google and Facebook rebutted by saying it was legitimate.
However, if Google's CEO is found to have personally approved the deal, he would be found to be complicit in the expansion of Google expanding its monopoly over the advertising market via manipulation.
Although the deal was public, it would be inaccurate to say Pichai approved it, a Google spokesperson told the AP.
"We sign hundreds of agreements every year that don’t require CEO approval, and this was no different," the spokesperson added.
Similarly, Meta spokesperson Chris Sgro said Friday Facebook's parent company's ad bidding agreement with Google and other similar agreements with other ad bidding platforms have "helped" in increasing the competition for ad placement.
"These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all," he claimed.
The new documents provide additional information about a series of Google programs, namely Bernanke, Reserve Price Optimization, and Dynamic Revenue Share. Google ran these programs between 2010 and 2019, and the company used all of them to manipulate and mislead publishers and advertisers, inflate its ad-buying bids, and penalize publishers for not complying with certain demands.
The new information came at a not-so-preferable time for the big tech companies, as Google and Facebook are heavily under fire over their anti-competitive practices, several of which are stressed upon by this lawsuit and the documents it unraveled.
