Mark Zuckerberg and Sundar Pichai were involved in advertising collaboration, the lawsuit claims

On Friday, a coalition of state attorneys led by Texas Attorney General Ken Paxton released a new antitrust complaint (PDF) against Google that provides more details about the company’s alleged collaboration with Facebook in programmatic advertising markets. The application was first reported by Politics.

First filed in November, the initial complaint (PDF) alleged a broad collaboration between the two companies, particularly in a collaborative project codenamed “Jedi Blue” where the companies teamed up to limit header bidding practices.

Based on internal emails, Friday’s complaint shows that the Jedi Blue agreement was reviewed at the highest level by both companies, with personal involvement from Sundar Pichai, Sheryl Sandberg and Mark Zuckerberg. In an email to Zuckerberg, Sandberg told the CEO “[t]his is a big case strategically. “In particular, the application refers to Zuckerberg and Sandberg by their job titles, but edits their name.

The legal implications of the allegations are still disputed, and the distinction between normal business practice and anti-competitive behavior will be hotly debated in court. Still, the state attorneys manage to dig out a series of moments where the two advertising giants seem to find themselves in a cooperating duopoly.

In a particularly unpleasant passage, the complaint quotes an email from 2015 in which “Google employees expressed fears that Google’s stock exchange ‘should actually compete’ with other stock exchanges at some point in the future.

Much of the case rests on the concessions that Google has reportedly given Facebook in the wake of the Jedi Blue event, including lower fees and longer timeout limits in swap bids. A recently unedited section of the complaint claims that the concessions gave Facebook a clear advantage in winning auctions.

A Facebook survey in 2019 showed that Facebook’s bids for in-app impressions won more frequently in Google-powered auctions than they did on any other platform. At the same time, the average price Facebook paid per display in the app, lower in Google-powered auctions than it was on any other platform. This would be an enigmatic result to say the least if Facebook faced the same competition for inventory across auction houses.

The case comes amid a series of antitrust actions against Google, including parallel antitrust cases focusing on search manipulation and its management of the Google Play Store. But the complaint led by Texas is without a doubt the most important for the company, as it focuses on the programmatic ad networks that have long provided the majority of the company’s revenue.

Google did not immediately respond to a request for comment, but described the complaint as “full of inaccuracies and lack of legal justification” in a statement to Politics.

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