New details have emerged about whether the agreement between Google and Facebook should have worked to rig the lucrative online advertising market.
The two technical titans called their contract “Jedi Blue”, according to an unedited version of the successful Texas suit that was launched against the companies and obtained by the Wall Street Journal.
The lawsuit, filed earlier this month, says the code name was “a twist on a Star Wars character name”, suggesting it may be linked to Aayla Secura, a blue-colored Jedi.
Google’s “illegal deal” with Facebook was allegedly hatched after the Mark Zuckerberg-led company refused to embrace an advertising sales method called header bidding, which posed a threat to Google̵
Headline bidding had helped website publishers bypass Google’s digital ad buying and selling marketplace, and had led to more favorable prices for publishers. The alternative network was so successful that around 2016, around 70 percent of the major online publishers used it, according to the state’s lawsuit.
If a major rival like the Facebook Audience Network advertising service, or FAN, embraced headerbinding, Google’s lucrative monopoly on the advertising market would be ruined, the states argued.
Need to combat the existential threat as a messenger and [Facebook Audience Network], ”Wrote a Google advertiser in an email from 2017 that is referenced in the suit.
That was when Google approached Facebook to leave the top bid. In exchange, Google is said to have lowered Facebook’s transaction fees to between 5 and 10 percent, well below the 20 percent they charged others.
Facebook was also able to send the bids directly to Google’s advertising server, rather than through an exchange, according to the report.
The search giant also kept Facebook up to date on the advertising opportunities that resulted from bot activity, and helped the social network avoid wasting its money on useless impressions. Google denied the same information to other auctioneers, the report said.
“Finally, Facebook limited its engagement with header bids to Google providing Facebook information, speed, and other benefits,” the lawsuit claims.
Google replied that it did not manipulate auctions and said that 25 other companies participate in the open advertising program.
“There is nothing exclusive about it [Facebook’s] involvement, and they do not receive data that is not made available to other buyers in the same way, ”said Google.
Facebook also gets almost twice as much time as auction competitors to “recognize” mobile and web users and then bid on ads, according to the unresolved lawsuit.
The Texas-led case is crucial for Google, which relies on advertising for much of its profits. The parent company Alphabet had a digital turnover of 37.1 billion dollars in its last quarterly report.