It was a busy Sunday for Google, publishing a blog post that forcefully pushes back on a new antitrust lawsuit threatening the company’s ad tech business.
In December, led by Texas Attorney General Ken Paxton, a group of Republican AGs sued Google for “anticompetitive practices and deceptive misrepresentations.” Core to the lawsuit was the charge that Google setup an anticompetitive arrangement with Facebook after learning its triopoly counterpart was leaning heavily into header bidding, a move that would ultimately hurt Google’s bottom line.
According to The New York Times, who did a deep dive on the alleged arrangement, “The threat of Facebook, one of the biggest ad buyers on the internet, supporting header bidding was a grave concern at Google.” Google executives went so far as to describe Facebook’s push into header bidding as an “existential threat.”
Ultimately, Facebook ended its own header bidding initiative to team up with Google on its Open Bidding effort. Open Bidding allows publishers to invite third-party demand from networks and exchanges to compete for inventory in a single auction in real-time, server-to-server. Per AdExchanger at the time, Open Bidding lets participating demand sources “get the same position as AdX in Google’s ad server, a coveted concession. But they also pay additional fees to participate and must give Google black box control over decisioning.”
What’s being purported by Paxton and his group of AGs is that Google granted Facebook better deal terms and prioritized Facebook Audience Network (FAN) in auctions to secure their participation.
In his blog post on Sunday, Adam Cohen, Director of Economic Policy at Google, called the charge a “myth.” He added that “Facebook is one of over 25 partners in Open Bidding, and their participation actually helps publishers.”
According to Cohen, “AG Paxton inaccurately claims that we manipulate the Open Bidding auction in FAN’s favor. We absolutely don’t. FAN must make the highest bid to win a given impression. If another eligible network or exchange bids higher, they win the auction. FAN’s participation in Open Bidding doesn’t prevent Facebook from participating in header bidding or any other similar system. In fact, FAN participates in several similar auctions on rival platforms.”
Paul Bannister of CafeMedia and AdThrive had this to say regarding Google’s blog post: “While there is some spin and nonsense in their response, there is also a lot of inaccuracy in the complaint that I figured Google would be all over.” He went on to add, however, that “the Open Bidding/header bidding point can go either way.”
Facebook has also issued a statement about the AG lawsuit, defending its relationship with Google. “Partnerships like this are common in the industry, and we have similar agreements with several other companies,” said a Facebook PR rep to CNBC. “Facebook continues to invest in these partnerships, and create new ones, which help increase competition in ad auctions to create the best outcomes for advertisers and publishers. Any suggestion that these types of agreements harm competition is baseless.”
