New details emerged about the deal that Google and Facebook allegedly made to defraud the lucrative online advertising market.
The two tech titans dubbed their contract “Jedi Blue”, according to an unedited version of the Texas blockbuster lawsuit launched against the companies and obtained by the Wall Street Journal.
The suit, opened earlier this month, says the code name was “a variation on the name of a Star Wars character”, suggesting it may be linked to Aayla Secura, a blue-colored Jedi.
Google’s “illegal deal” with Facebook was allegedly traced in exchange for the company’s refusal led by Mark Zuckerberg to adopt an ad sales method called header bidding, which posed a threat to Google’s iron control in the digital advertising market .
Header bidding has helped website publishers bypass the Google market for buying and selling digital ads and has led to more favorable prices for publishers. The alternative network was so successful that, in 2016, about 70 percent of the top web publishers were using it, according to state lawsuits.
If a major rival, such as the Facebook Audience Network ad service, or FAN, adopted header linking, Google’s lucrative monopoly on the ad market would be destroyed, the states claimed.
“We need to fight against the existential threat posed by header moves and [Facebook Audience Network]”, Wrote a Google advertising executive in a 2017 email mentioned in the process.
That’s when Google approached Facebook about abandoning header bidding. In return, Google reportedly reduced Facebook’s transaction fees to between 5 and 10 percent, well below the 20 percent it charged others.
Facebook was also able to send its bids directly to Google’s ad server, rather than through an exchange, according to the report.
The search giant also kept Facebook up to date on what ad opportunities were the result of bot activity, helping the social network avoid wasting its money on useless impressions. Google has denied the same information to other auction participants, the report said.
“In the end, Facebook restricted its involvement with header bidding in exchange for Google giving Facebook information, speed and other advantages,” the suit claimed.
Google replied that it did not manipulate any auction and said another 25 companies are participating in its open bidding program.
“There is nothing exclusive about [Facebook’s] engagement and don’t receive data that isn’t made available in a similar way to other buyers, ”said Google.
Facebook also has almost twice as much time as auction competitors to “recognize” mobile and web users and then bid on ads, according to the unwritten process.
The Texas-led case is critical for Google, which relies on advertising for much of its profits. Its parent company, Alphabet, recorded $ 37.1 billion in digital advertising revenue in its latest quarterly report.