On September 14th, Caixin News Agency reported that in the antitrust trial of the US Department of Justice against Google, a former Facebook advertising executive testified that due to Google's monopoly on online advertising technology, even Facebook was unable to successfully compete with Google.
In addition, the executive also revealed a secret agreement reached between Facebook's parent company Meta and Google in 2018 (when Facebook had not yet changed its name to Meta).
Brian Boland, who was responsible for Facebook advertising technology from 2009 to 2019, revealed to a federal court in Virginia that the social network initially attempted to directly challenge Google in the advertising market through the Facebook Audience Network platform.
Audience Network is an advertising service product of Facebook that not only allows advertisers to place ads on Facebook or Instagram, but also allows advertisers to display ads on third-party apps and websites outside of Facebook.
But by 2017, Facebook had "given up struggling" and concluded that due to Google's monopoly position and the search giant's advantage in advertising tools, Facebook was struggling to compete effectively with Google. Boland pointed out that Google's tools give it the opportunity to select the best products.
Secret agreement
Boland pointed out to Virginia federal court judge Leonie Brinkema that Google's advertising trading platform is like: Google can select 30 of the best apples from a box before others have a chance to buy them, and the only ones left in the box are rotten apples to choose from.
In addition, Boland also revealed a secret agreement signed between Facebook and Google. Given the known inability to compete effectively, Facebook and Google engaged in a six-month negotiation, with Boland fully involved, and ultimately signed an agreement in 2018.
The agreement, internally known as "Jedi Blue" within Facebook, states that when Facebook bids for its advertising within the Audience Network through the Google Play platform, it will receive priority treatment.
The official name of this agreement is the "Online Bidding Agreement", which has been approved by the top executives of both companies. Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai personally signed the agreement.
Interestingly, this transaction seems to have never been put on the table. Despite Google and Facebook being the largest and second largest participants in the online advertising market, the specific details of this transaction have not been disclosed in Friday's court testimony. Court documents only show that "Google hopes Facebook will pay it 15% of the effective media costs".
In 2020, some state attorneys general sued Google for allegedly monopolizing the advertising technology market and claimed that the agreement between the two companies violated antitrust laws. These prosecutors claim that Google proposed this deal to Facebook to avoid Facebook adopting a new technology that would weaken Google's monopoly position. Subsequently, a judge in New York dismissed these allegations, stating that there was no inappropriate reason for the two companies to reach an agreement.
The European antitrust enforcement agency also investigated the transaction and concluded the investigation in March 2022 without taking any action.
In addition, when the US Department of Justice sued Google for monopolizing the advertising technology market last year, they did not accuse the agreement of being anti competitive, but emphasized that even tech giants of Meta's scale cannot compete with it.
Other evidence
In addition to Boland, several corporate executives testified for Google's antitrust investigation.
Recently, Stephanie Layser, a former executive of News Corporation, pointed out that in 2017, News Corporation estimated that if it gave up its cooperation with Google's advertising agency and was no longer subject to Google's rules and regulations, it would lose at least $9 million in advertising revenue that year.
She believes that Google's advertising business benefits it more, but harms the interests of publishers. Almost no one in the industry uses other products because Google's publisher ad server is tied to Google's ad trading platform.
Layser emphasized that by the time she left, approximately 70-80% of News Corporation's advertising transactions were conducted through Google's advertising platform. But Google argues that this data is outdated, with large publishers now having six different platforms to sell ads and over 80 related services.
Tim Wolfe, an advertising executive at Gannett, the largest newspaper group in the United States, also testified that Gannett has been using Google ad servers for about 13 years and has never found any other viable alternative.
In addition, employees from multiple companies such as Trade Desk, Comcast, and PubMatic are also on the list of potential witnesses to attend, with over twenty current or former Google employees waiting to be called upon.