Back in 2017, Facebook was still trying to figure out new ways to sell digital advertisements online. The following way was supposed to dismantle Google’s Control of the digital market. Fast-forwarding to less than two years, the tables turned and Facebook joined an alliance of companies that were backed by a similar approach which was led by Google.
The tale remains unsolved as Facebook never mentioned why it pulled back from its project. However, the conspiracy heated up, when a coalition of state attorneys general filed a lawsuit against Google for striking a secret illegal deal with Facebook.
According to Business Insiders, the coalition was led by Texa’s attorney general, Ken Paxton who filed an Antitrust Lawsuit against Google. The accusation was bold. However, if both the companies are found guilty, each of the companies has to pay a penalty of USD 100 Million, which may not be a big amount for these giants, as they have already faced a fined bigger than that amount.
The main deal was Google when it was accused of leveraging unfairly for its monopoly power in its Adtech business. It all comes from a place called Header Bidding. Other 20 companies from the alliance reported to the attorney’s general that, Google had offered Facebook advantages getting over the area of adtech called header bidding.
Even though Google declined all the claims, Facebook had remained silent and unavailable to comment back.
Header Bidding is a program where different websites and apps can sell ad space online. The program allows various advertisers to bid on a certain part of ad space concurrently. The publishers take the highest bid offers from the advertisers and place their ads. This can also be seen as an alternative adtech industry for Google’s “waterfalling” or “daisy chain” system that runs the action in a sequence.
The suit mentions that Google tried to stop Facebook by striking a deal to stop it from getting into header bidding. Later on, Google and Facebook also said that these kinds of deals were common in the digital marketing industry, as long as they were not preventing competition.
To clear up the doubts, both Google and Facebook sent their representatives as a spokesperson.
“The complaint misrepresents this agreement, as it does many other aspects of our ad tech business.” – said Julie Tarallo McAlister, a spokeswoman from Google. She further adds that Facebook was only one of the many companies that participate in the programs led by Google, Facebook is also a partner in similar alliances with other companies.
While Christopher Sgro, a Facebook spokesman, tells that these kinds of deals with Google, “help increase competition in ad auctions” which can benefit both advertisers and publishers. He adds “ Any suggestion that these types of agreements harm competition s baseless”. With this, both the companies declined to elaborate further on the specific topics about their deal.