New details have emerged about the deal Google and Facebook allegedly struck to manipulate the lucrative online advertising market.
The two tech titans named their contract “Jedi Blue,” according to an unedited version of the blockbuster Texas lawsuit filed against the companies and obtained by the Wall Street Journal.
The lawsuit, filed earlier this month, says the code name was “a spin on a Star Wars character,” suggesting it could be related to Aayla Secura, a blue-hued Jedi.
Google’s “illegal agreement” with Facebook is said to have come in exchange for the Mark Zuckerberg-led company refusing to embrace an ad sales method called header bidding that threatened Google’s iron grip on digital advertising market.
Header bids helped website publishers bypass Google’s marketplace for buying and selling digital ads and had resulted in more favorable prices for publishers. The alternative network was so successful that in 2016, about 70 percent of major web publishers used it, according to the state lawsuit.
If a major rival like Facebook Audience Network ad service, or FAN, embraced header binding, Google’s profitable monopoly in the ad marketplace would be shattered, the states claimed.
“Need to head out the existential threat of and [Facebook Audience Network], ”Wrote a Google ad executive in a 2017 email referenced in the lawsuit.
That’s when Google approached Facebook to stop bidding via headers. In return, Google would have lowered Facebook’s transaction fees to between 5 and 10 percent, well below the 20 percent it charged others.
According to the report, Facebook was also able to send its bids directly to Google’s ad server, rather than through an exchange.
The search giant also kept Facebook informed about the advertising opportunities that resulted from bot activity, preventing the social network from wasting its money on useless impressions. Google declined the same information to other auction participants, the report said.
“Ultimately, Facebook limited its involvement in header bidding in exchange for Google giving Facebook information, speed, and other benefits,” the lawsuit said.
Google replied that it had not manipulated auctions and said 25 other companies are participating in the open bid ad program.
‘There is nothing exclusive about it [Facebook’s] engagement, and they don’t receive data that isn’t made available to other buyers in the same way, ”said Google.
Facebook is also given nearly twice as much time as auction competitors to recognize mobile and internet users and then bid on ads, according to the pending lawsuit.
The Texas-led case is crucial to Google, which relies on ads for a large portion of its profits. Its parent company, Alphabet, posted digital ad revenue of $ 37.1 billion in its latest quarterly report.