Judge dismisses claims Facebook, Google had secret digital advertising pact
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A federal judge in the US has cleared Facebook and Google of conspiracy in connection with an online marketing deal between the two companies, while the pending antitrust case against the latter continues.
As reported by The edge (opens in new tab)Judge P. Kevin Castel claimed that the “Jedi Blue” deal (opens in new tab) did not break any laws because of “Facebook’s motivation to use its economic influence as an advertisement to make the toughest bargains possible, and that Google was motivated by the legitimate, pro-competitive desire to get as much business from Facebook as possible.”
Under the agreement, Facebook would avoid “header bidding,” a practice that allows companies to run their own auctions for ad space in exchange for higher placement on Google’s own ad lists.
But in simple terms, the pact was not considered conspiracy, as both companies were seen to have acted in their own separate interests.
Google’s Antitrust Problems
While both companies have been cleared of legal violations, the renewed spotlight on the Jedi Blue deal — first uncovered through another antitrust suit filed against Google in 2020 by a number of US states — has highlighted scrutiny that a small number of large tech companies have more than online content advertising.
In an online blog post (opens in new tab)Google claimed that dismissing allegations of conspiracy surrounding the Jedi Blue deal proved this latest antitrust case, led by Texas Attorney General Ken Paxton, is “deeply flawed.” It also claimed that “much” of the matter has now been decided in its favor.
However, the tech giant is not yet clear. Judge Castel . pronunciation (opens in new tab) Google’s dismissal claim — on the grounds that the states filing the case waited too long — have been delayed until later in the proceedings. He also wrote that the states “have credibly claimed” that some of Google’s practices in the context of its advertising activities servers and ad exchanges are anti-competitive.
One of these practices was: Google’s Secret Operation of “Project Bernanke” (opens in new tab)a program that generated hundreds of millions of dollars in revenue for Google over several years by using past bidding data from the company’s ad exchanges to give itself an advantage over competitors, making it easier for Google to win bids in ad auctions .
Google is also no stranger to antitrust lawsuits. The US Department of Justice filed an antitrust suit against the company in 2020 and is reportedly seeking a new filing after several years of building the case that Google’s parent company Alphabet Inc. has monopolized the field of digital content marketing (via Bloomberg (opens in new tab)).
In its first complaint, the DOJ wrote that “U.S. consumers are being forced to accept Google’s policies, privacy practices, and use of personal data; and new companies with innovative business models cannot emerge from the long shadow of Google.”