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Google Anticompetitive Actions and Agreement with Facebook Antitrust Class Action

Google, LLC has become overwhelmingly powerful in the online advertising market. It has achieved this, says the complaint for this antitrust class action, through “control over the overwhelming amount of advertising sold on its advertising exchange…” and now takes anticompetitive action to prevent competition—in particular, the complaint says, through an agreement with its biggest potential competitor, Facebook, Inc.

The class for this action is all persons and entities who bought advertising on or over Facebook, between September 1, 2018 and the time when the effects of the anticompetitive actions stop.

Google and Facebook both sell online advertising and allow businesses to use the personal information of their users to target their advertising more accurately.

The complaint alleges, “The purchase and sale of advertising on the web is among the most complicated of financial markets. Publishers”—that is, sellers of advertising space—“and advertisers trade display inventory through a series of intermediaries on electronic exchanges at lightning speed.”

Google’s AdX is the largest exchange to facilitate these transactions. According to the complaint, “Google uses its powerful position on every side of the online display market to unlawfully exclude competition.”

Google earns three fees on its advertising business—one from the publishers who sell space, a second from the advertisers who buy space, and a third from the clearing of their transactions in its exchange.

The details of how Google cut off competition are complicated. However, among other things, the complaint alleges that it forces both the buyers and sellers to trade in its exchange, use its ad server, and clear their transactions with it. It limits publishers to selling on only one exchange at a time and keeps them from accessing and sharing information about their space inventory.

To make the market more competitive again, publishers adopted an innovation called header bidding. This, the complaint says, “routed ad inventory to multiple neutral exchanges each time a user visited a web page.” Advertisers also began participating in this practice.

Google then began redacting certain fields from the data it allows publishers to have. This stopped publishers from making adequate comparisons of performance between exchanges. This and other actions taken by Google crippled header bidding.

In time, Facebook became a potential competitor to Google. In March 2017, Facebook announced it would support header bidding, which allowed publishers and advertisers to avoid paying exchange fees. This was a threat to Google’s dominance, and Google began negotiations to get Facebook to stop supporting header bidding.

In September 2018, the two companies concluded an agreement. Under this agreement, the complaint says, Facebook “agreed to limit its program in return for preferred treatment in the Google advertising business system.” The complaint details various aspects of the agreement and alleges that this strengthened Google’s market dominance.

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

Google Anticompetitive Actions and Agreement with Facebook Antitrust Complaint

February 1, 2021

Google, LLC has become overwhelmingly powerful in the online advertising market. It has achieved this, says the complaint for this antitrust class action, through “control over the overwhelming amount of advertising sold on its advertising exchange…” and now takes anticompetitive action to prevent competition—in particular, the complaint says, through an agreement with its biggest potential competitor, Facebook, Inc.

Google Anticompetitive Actions and Agreement with Facebook Antitrust Complaint

Case Event History

Google Anticompetitive Actions and Agreement with Facebook Antitrust Complaint

February 1, 2021

Google, LLC has become overwhelmingly powerful in the online advertising market. It has achieved this, says the complaint for this antitrust class action, through “control over the overwhelming amount of advertising sold on its advertising exchange…” and now takes anticompetitive action to prevent competition—in particular, the complaint says, through an agreement with its biggest potential competitor, Facebook, Inc.

Google Anticompetitive Actions and Agreement with Facebook Antitrust Complaint
Tags: Anticompetitive Actions, Antitrust, Blocking Competition