Sep 18, 2024 05:00:00

In the Google advertising trial, a former Facebook executive testified that the Jedi Blue contract was a slap on the wrist of Google's monopoly

by

Prachatai

In the trial of the US Department of Justice v. Google antitrust lawsuit that began on September 9, 2024, executives of major US publishers and mass media companies appeared as witnesses to testify about Google's monopoly practices in the online advertising market. A former executive who led Facebook's (now Meta) advertising technology division recently testified that the anticompetitive agreements it concluded with Google were the result of the company's decision that it could not compete with Google's dominance.

Even Facebook (META) Couldn't Compete With Google (GOOGL) - Bloomberg
https://www.bloomberg.com/news/articles/2024-09-13/even-facebook-couldn-t-compete-with-google-ex-ad-chief-says

DOJ vs. Google, Day Five Rewind: Prebid Reality Check, Unfair Rev Share And Jedi Blue (Sorta) | AdExchanger
https://www.adexchanger.com/marketers/doj-vs-google-day-five-rewind-prebid-reality-check-unfair-rev-share-and-jedi-blue-sorta/

On the fifth day of the trial, on September 13, 2024, Brian Bolland, who served as Facebook's head of advertising technology from 2009 to 2019, took the witness stand and testified that Facebook initially aimed to become the top of the online advertising market, but gave up because it felt that Google's monopoly on the advertising technology market was too strong and it would be impossible to compete, so it ended up entering into an agreement with Google.

The agreement referred to in Borland's testimony was a secret network bidding agreement between Google and Facebook that was signed in 2018. It was called the 'Jedi Blue' contract after its internal Google codename. The contract provided Facebook with a favor when it bid on web and mobile app ads through Google's ad exchange.

Details of Google's measures to monopolize the Internet advertising market, 'Jedi Blue' and 'Project NERA', revealed - GIGAZINE

'Google stands between us and the impressions we want to buy,' reportedly a July 2017 internal document about Facebook's ad delivery network, Facebook Audience Network.

'It concerned me to learn that there was a layer between us and our advertisers,' Boland, who oversaw six months of negotiations between the two companies, told Judge Leonie Brinkema. 'Google's ad exchange gave Google what's known as a 'last look,' meaning that Google could decide whether to buy the inventory after it had been auctioned.'

Borland likens this approach to Google picking 30 good apples from a crate and keeping only the blemished or blemished ones. 'What you're left with is the unsold apples.'

The deal Facebook struck with Google was approved at the highest levels of both companies and personally signed by Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai.

Court documents state that Google 'demanded that Facebook pay working media costs, or 15% of the advertising budget, to eliminate the last-look advantage.'

In 2020, a group of state attorneys general sued Google for monopolizing the ad technology market, arguing that the collusion between the first and second largest online advertising companies violated antitrust laws, but a New York court dismissed the allegations, saying there was 'nothing mysterious or suspicious' about how the two companies reached the agreement. European antitrust authorities, which investigated the deal, also closed their investigations in March 2022 without taking any action.

The US Department of Justice, which has now sued Google for monopolizing the ad tech market, has switched its stance from arguing that the Jedi Blue contracts were anti-competitive to emphasizing that even large companies like Meta could not compete with Google's monopoly, Bloomberg points out.

Borland, who led the Jedi Blue deal, left Facebook in 2020 after expressing concerns internally about Facebook's lack of growth in online display advertising. The company, which changed its name to Meta in 2021, has since stopped buying display ads on the web and has shifted its focus to mobile advertising.