A look at the incentives, like guaranteed auction win percentages, that Facebook got from Google in the ad partnership that is now a focus of an antitrust suit
Facebook was going to compete with Google for some advertising sales but backed away from the plan after the companies cut a preferential deal, according to court documents.
New York Times
Context & Ripple Effects
The Texas AG's suit filed in December 2020 already alleged Google bought off a would-be rival with special privileges in exchange for abandoning a competing ad system; this report adds the specific currency of the bargain — guaranteed auction win percentages and other preferential terms buried in the partnership agreement.
Facebook abandoned its plan to compete with Google for certain advertising sales, so advertisers bidding in Google's auctions faced one fewer large buyer-side competitor immediately after the deal took effect.
Second-order effects
Publishers and rival ad-tech firms now have documentary evidence that auction outcomes were shaped by side agreements rather than open bidding, strengthening the state AGs' case and pressuring other exchanges to disclose comparable arrangements.
Third-order effects
If courts accept that guaranteed win rates constitute exclusionary dealing, ad-tech intermediaries will face structural limits on preferential pacts with large buyers, pushing the industry toward audited, uniform auction rules.
The trend: Digital advertising is shifting from nominally competitive auctions toward regulator-litigated market structure, with state attorneys general using internal deal documents to test whether exchange operators can rig their own markets.
“Executives at six of the more than 20 partners in the alliance told The Times that their agreements with Google did not include many of the same generous terms ... and that the search giant had handed Facebook a significant advantage over the rest of them” https://www.nytimes.co…
It's easy to read this as just some technical cheating over ads from Google and Facebook in collusion. But this deal alone made sure hundreds of millions of dollars earned by publishers were kept between those two companies. 🧶 https://www.nytimes.com/...
‘The disclosure of the deal between the tech giants has renewed concerns about how the biggest technology companies band together to close off competition’ > Behind a Secret Deal Between Google and Facebook ↘️ https://www.nytimes.com/...
“A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market.” https://www.nytimes.com/...
The @nytimes got a copy of the unredacted complaint against Facebook & Google - some outrageous details. Numerous ad tech firms were likely competing against Facebook in Google auctions with FB given 140 extra milliseconds & numerous other benefits. Outrageous market imbalance. h…
This is the first Big Tech antitrust complaint that I believe has serious merit. If the draft terms of this deal were executed, it sure seems Google and Facebook will have a difficult time defending themselves against what appears to be allegations of collusion and price fixing. …
Google-FB ad deal appears to be price fixing, which could give rise to felony Section 1 case under Sherman Act. If there was a plan for a joint legal defense, that could be a second offense. Each offense can be 3 years in prison. Would give gov't leverage to change biz models. ht…
Google gave Facebook speed and data advantages when bidding for ads in exchange for a competitive truce, according to redacted part of Texas antitrust lawsuit. From @daiwaka and @tiffkhsu https://www.nytimes.com/...
@Google and @Facebook collaborating like two mafia families. Unbelievable. @vestager needs to read this. We need to muzzle these companies as if they were rabid dogs. Or get the rusty hacksaw out, and cut their market-killing monopolies to pieces https://www-nytimes-com.cdn.amppr…
Behind a Secret Deal Between Google and Facebook Facebook was going to compete with Google for some advertising sales but backed away from the plan after the companies cut a preferential deal, according to court documents. https://www.nytimes.com/...
Google extended to Facebook, its closest rival for digital advertising dollars, a sweetheart deal to be a partner. The two companies accounted for more than half of all digital ad spending in 2019. https://www.nytimes.com/...
In 2017, Facebook seemed prepared to take on Google's digital ad dominance. We took a look at the preferential deal that regulators say contributed to Facebook's decision to partner instead of challenge Google w/ @tiffkhsu https://www.nytimes.com/...
Google has secretly given advertising advantages to Facebook. The clear disparity in how other companies are treated by Google when compared to Facebook has not been previously reported. https://www.nytimes.com/... https://twitter.com/...
“This idea that the major tech companie are competing against each other is very much overstated. In many ways, they reinforce each other's monopoly power.” https://twitter.com/...
The adtech market is hard to get your arms around. And that's an advantage for those who control it. Google and Facebook have a lot more explaining to do thanks to this piece. https://www.nytimes.com/... https://twitter.com/...