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Google gets reprieve in the US in antitrust allegation over ads agreement with Facebook

Google gets reprieve in the US in antitrust allegation over ads agreement with Facebook
Photo Credit: Pixabay
14 Sep, 2022
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A federal court in the US has dismissed allegations that the network bidding agreement between Google and Facebook amounted to a conspiracy to monopolise the ad display market. However, the court gave a go-ahead for proceedings in other antitrust allegations against Google related to its ad business. 

Attorneys General of ten US states has brought a lawsuit against Google in the Eastern District of Texas alleging that the Alphabet company has “monopolised or attempted to monopolise” online display ads and “unlawfully” used its dominant position to combine the sale of its ad server (used by publishers to manage their inventory of display ads) with its ad exchange (a platform used to conduct auctions for the sale of display ads).  The states also alleged that Google entered into an “unlawful restraint of trade” with Facebook. 

The court said that the allegations made by the states are not plausible as they could not adequately prove anything suspicious behind Facebook’s motivation to collaborate with Google. 

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Google entered into a network bidding agreement with Facebook in September 2018. The states argued that after the NBA Facebook substantially curtailed its use of a practice called header bidding in return for an allocation of a portion of publishers’ web display and developers’ in-app ad auctions. This gave Facebook’s FAN ad network a competitive edge over its rivals. 

Header bidding allowed publishers to solicit live, competitive bids from multiple exchanges. According to the states, header bidding was very popular with publishers and by 2016 almost 70% of major publishers were using it. 

The states also alleged that header bidding was a “competitive threat’ to Google’s ad server and exchange markets. So, by 2017, Google started Exchange Bidding, which allowed “publishers to route their inventory to more than one exchange at a time and to receive live, competitive bids from other exchanges.” 

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These ad exchanges run automated auctions of ad impressions and competing advertisers submit bids based on what ad a person wants to see. 

Google said in a blog post that the decision underscores that the case is "deeply flawed".

"Advertising technology is a fiercely competitive industry and our products increase choice for publishers, advertisers and consumers while enabling small businesses to affordably find new customers," Google said.

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Google is facing lawsuits and antitrust investigations in several countries over its ads business. In India, the antitrust watchdog Competition Commission of India (CCI) ordered an inquiry on a complaint by Digital News Publishers Association that Google was denying a fair share in digital advertising revenue to news publishers.