Zuckerberg, Pichai signed off on backroom Facebook-Google collusion, lawsuit alleges

Ailan Evans, DCNF

Facebook and Google CEOs Mark Zuckerberg and Sundar Pichai signed off on a deal between the two companies to rig the digital advertising market, a recently unredacted lawsuit alleges.

The existence of the deal, dubbed Jedi Blue, was first revealed in a complaint filed by Republican Texas Attorney General Ken Paxton in December 2020 which alleged that Google unlawfully abused its dominance in the digital ads market. The complaint alleged that Google struck a deal with Facebook in 2018 to give the social company secret advantages in its ad exchanges, known as Open Bidding auctions, to the detriment of competitors.

An unredacted version of the complaint filed Friday alleges that Facebook CEO Mark Zuckerberg personally signed off on the deal. The complaint alleges Facebook chief operating officer Sheryl Sandberg brokered the deal with top Google executive Philipp Schindler and pushed Zuckerberg to approve.

“Facebook’s Chief Operating Officer [redacted] was explicit that ‘[t]his is a big deal strategically’ in an email thread that included Facebook CEO,” the complaint said. “When the economic terms had taken their form, the team sent an email addressed directly to CEO [redacted]: ‘We’re nearly ready to sign and need your approval to move forward.’”

The complaint also alleges that Google CEO Sundar Pichai personally approved the terms of the deal.

Google spokesman Peter Schottenfels denied the allegations in a statement to Politico, saying Pichai was not involved in the deal.

“Despite Attorney General Paxton’s three attempts to re-write his complaint, it is still full of inaccuracies and lacks legal merit,” Schottenfels told the outlet. “Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world. There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers.”

Facebook spokesman Christopher Sgro told Politico the agreement was above board and commensurate with other agreements the company had.

“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all,” Sgro said, Politico reported.

The unredacted document also contains allegations of anticompetitive behavior centered on several programs. One program, “Dynamic Revenue Share,” was allegedly implemented after Google had seen what its rivals bid on its ad auctions, and it changed Google’s fees so that its products would win more auctions.

One Google employee cited in the complaint allegedly said the program “makes the auction untruthful as we determine the AdX revshare after seeing buyers’ bids.”

Meta and Google did not immediately respond to the Daily Caller News Foundation’s requests for comment.

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