Google and Facebook Collaborated to Protect Their Trust From Antitrust Investigation

How do you know your trust is a trust? When you're not only actively colluding to control the ad market, but also to fight an antitrust investigation.

Brief primer.

Google dominates search and has a big grip on the browser and mobile OS market, but makes the vast majority of its cash from ads. The path to ad dominance was littered with blatantly illegal actions that are now coming home to roost.

And the wildest of them all may be its alliance with Facebook.

Facebook Inc. and Alphabet Inc.’s Google agreed to “cooperate and assist one another” if they ever faced an investigation into their pact to work together in online advertising, according to an unredacted version of a lawsuit filed by 10 states against Google last week.

Ten Republican attorneys general, led by Texas, are alleging that the two companies cut a deal in September 2018 in which Facebook agreed not to compete with Google’s online advertising tools in return for special treatment when it used them.

Google used language from “Star Wars” as a code name for the deal, according to the lawsuit, which redacted the actual name. The draft version of the suit says it was known as “Jedi Blue.”

Death Star might have been more apt. But overgrown man-children stomping the economy underfoot while rigging elections like to pretend they're the good guys.

I'm not a Star Wars fan, but maybe someone can remind me of the scene where Han Solo and Luke Skywalker secretly collaborate to have their multi-billion dollar corporations control the ad market. Maybe it was in one of the prequels?

The redacted lawsuit filed last week makes no mention of Facebook Chief Operating Officer Sheryl Sandberg. According to the draft version, Ms. Sandberg signed the deal with Google. The draft version also cites an email where she told CEO Mark Zuckerberg and other executives: “This is a big deal strategically.”

Maybe not in the way she intended that to mean.

Going up against Big Tech is an uphill battle. Microsoft shook off government regulators. I'm not betting on the DOJ at this point to do anything except shake down the companies for a few billion and then pass them on to Stacey Abrams and her allies, and state AGs are vastly overmatched in this arena. Unless they've got an ace. 

And this might be the ace.

The final version of the lawsuit didn’t make public details about the deal’s value. The draft states that starting in the deal’s fourth year, Facebook is locked into spending a minimum of $500 million annually in Google-run ad auctions. “Facebook is to win a fixed percent of those auctions,” the draft version says. 

According to the draft version, an internal Facebook document described the deal as “relatively cheap” when compared with direct competition, while a Google presentation said if the company couldn’t “avoid competing with” Facebook, it would collaborate to “build a moat.” The redacted lawsuit filed last week doesn’t include those quotes.

According to an internal Google communication from November 2017 discussing a potential “Facebook Partnership” for Google’s “Top Partner Council,” Google said that its endgame was to “collaborate when necessary to maintain status quo…” The redacted lawsuit describes a presentation about Google’s endgame, but doesn’t include the quotes.

Fixed percent. A moat. Status quo.

This is what an oligarchy sounds like.


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