New lawsuit alleges Google and Facebook made a deal to help each other against antitrust action
The big picture: While many allegations of anticompetitive behavior that have been made against Facebook and Google will be difficult to prove to a satisfactory degree in court, price-fixing by virtue of a strategic deal could be a different matter. According to a new draft lawsuit, Facebook and Google have made an agreement to “cooperate and assist one another” if they were ever investigated for working to maintain a duopoly in the online advertising market.
Earlier this month, Google was hit with two different antitrust lawsuits that represent a multi-state effort to prove the search giant has illegally maintained a monopolistic hold in certain markets, often through the creation of high barriers of entry for companies that could potentially challenge its dominance. That’s on top of an existing DOJ lawsuit that already made Google look like the Microsoft of the nineties.
Facebook was also hit by similar lawsuits from 40 state attorneys general as well as the FTC. The main points of interest are the various acquisitions made over the years (including Instagram and WhatsApp), and a series of questionable business practices that have been centered on gathering data on potential competitors and systematically throwing them off the rails while cloning their services.
According to a new draft lawsuit filed by 10 states and spotted by the Wall Street Journal, Facebook and Google have made an agreement to “cooperate and assist one another” if they were ever investigated for maintaining an online advertising duopoly.
The lawsuit cites internal documents that show how Facebook agreed in September 2018 to avoid competing with Google’s online advertising tools as long as the latter would offer special treatment for Facebook when using them. This essentially means the two companies agreed to split a huge chunk of the advertising market between them.
The Wall Street Journal says that Google used “Jedi Blue” as a codename for the deal. Furthermore, the two firms expected antitrust investigations and have had ample discussions on how to prepare a coordinated response. Both Google and Facebook deny the allegations and assert that “there’s nothing exclusive about Facebook’s involvement,” as the latter supposedly receives the same data that is provided to other ad buyers.
In related news, Google has responded to the DOJ’s lawsuit over search dominance by reiterating that people use Google search “because they choose to, not because they are forced to.” And Facebook had reportedly considered helping others create rival social networks by licensing its code, which would have painted the social giant in a different light, if only it would have appeased regulators.