In the US Department of Justice's antitrust trial against Google, a former Facebook advertising executive testified, saying that due to Google's monopoly on online advertising technology, even Facebook was unable to successfully compete with Google.
Additionally, the executive revealed Facebook's parent company$Meta Platforms (META.US)$versus$Alphabet-A (GOOGL.US)$A secret agreement reached in 2018 (Facebook had not changed its name to Meta at the time).
Brian Boland, who was responsible for Facebook advertising technology from 2009 to 2019, revealed to the Virginia federal court that the social network initially tried to directly challenge Google in the advertising market through the Facebook Audience Network (Facebook Audience Network) platform.
Audience Network is a Facebook advertising service product that not only allows advertisers to post ads on Facebook or Instagram, but also allows advertisers to display ads on third-party apps and websites other than Facebook.
However, by 2017, Facebook “gave up the struggle” and concluded that due to Google's monopoly position and the search giant's advantage in advertising tools, it was difficult for Facebook to compete effectively with Google. Boland notes that Google's tools give it a “chance to pick the best products.”
Confidential agreement
Boland pointed out to Virginia Federal Court Judge Leonie Brinkema that Google's ad trading platform is like: Google can pick the 30 best apples from a box before anyone else has a chance to buy them, and only bad apples are left in the box to pick.
Furthermore, Boland also revealed a secret clause signed between Facebook and Google. On the premise that Facebook and Google were known to be unable to compete effectively, there was a six-month negotiation between them. Boland participated throughout the process, and finally signed an agreement in 2018.
The agreement is known as “Jedi Blue” within Facebook, and the content is that when Facebook bids for advertising within Audience Network through the Google trading platform, it can receive priority treatment.
The agreement, officially called the “Online Bidding Agreement,” was approved by the top management of the two companies. Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai personally signed the agreement.
What's interesting is that this deal never seems to have come to the table. Rao is that Google and Facebook are the largest and second-largest players in the online advertising market, respectively, but the details of this deal were still not disclosed in court testimony on Friday. Court documents only showed that “Google wants Facebook to pay 15% of its effective media costs.”
Earlier in 2020, some state attorneys general sued Google for allegedly monopolizing the advertising technology market, and claimed that the agreement between the two companies violated antitrust laws. The attorneys general claimed that Google proposed this deal to Facebook to prevent Facebook from adopting a new technology, which would weaken Google's monopoly position. Subsequently, a New York judge dismissed the charges, saying that the two companies had reached an agreement for no reason wrong.
The transaction was also investigated by European antitrust enforcement agencies, which ended in March 2022, and no action was taken.
Furthermore, when the US Department of Justice sued Google last year for monopolizing the ad technology market, they did not accuse the agreement of being anti-competitive, but emphasized that even a tech giant of the size of Meta could not compete with it.
Other evidence
In addition to Boland, a number of business executives testified to Google's antitrust investigation.
Recently, Stephanie Layser, a former executive of News Group, pointed out that in 2017 News Group estimated that if it abandons cooperation with Google's advertising agencies and is no longer bound by Google's rules and regulations, then News Group will lose at least 9 million dollars in advertising revenue that year.
She believes that Google's advertising business benefits it more, but it harms the interests of publishers. Few people in the industry use other products because Google's publisher ad servers are tied to Google's ad exchange platform.
Layser stressed that by the time she left her job, about 70-80% of News Group's advertising transactions were carried out through Google's advertising platform. However, Google argues that this data is out of date; large publishers now basically have six different platforms to sell advertisements, and there are more than 80 types of related services.
Tim Wolfe, an advertising executive at Gannett, the most widely distributed newspaper group in the US, also testified that Gannett has been using Google ad servers for about 13 years and has never been able to find any other realistic alternative.
In addition, employees from various companies such as Trade Desk, Comcast, and PubMatic are also on the list of likely witnesses, and more than 20 current or former Google employees are waiting to be “called.”
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