Washington: A lawsuit filed by attorney generals across the United States of America has brought to light extensive manipulation allegedly committed by Facebook (now rebranded as Meta) and Google in advertising auctions. The lawsuit was first filed in December 2020 and claimed Google misled publishers and advertisers about the price and process of advertising auctions.
The now unredacted documents have alleged that Google used its hegemony in the advertising market to mislead advertisers and consumers in order to grow its own profits. Meta CEO Mark Zuckerberg and Google CEO Sundar Pichai were aware of the issue and even signed off on actions pertaining to it according to the attorney-generals.
Testimony from Google employees in the lawsuit likened the practise to "insider information" which was used to mislead certain advertisers about the cost of ads. Some advertisement costs were inflated artificially, and the difference was pocketed by Google and used to manipulate other advertising auctions to suppress competing brands and promote ones it found profitable, the lawsuit says.
Facebook's chief operating officer, Sheryl Sandberg, was "explicit that 'this is a big deal strategically'" in a 2018 email thread about a deal which involved Facebook bidding for and winning and securing a percentage of. Google ads. The deal was finalised with emails directly sent to Zuckerberg.
Meta spokesperson Chris Sgro said Friday that the company's ad bidding agreement with Google and similar agreements it has with other bidding platforms "have helped to increase competition for ad placements".
Google spokesperson Peter Schottenfels was quoted by The Guardian as lambasting the lawsuit for its 'lack of legal merit' and falsities.
If Pichai is found to have personally approved the deal, he may be found to be complicit in the expansion of Google's monopoly over the advertising market through manipulation. Another Google spokesperson told the AP that while the deal was not a secret, it was inaccurate to say that Pichai approved it.
Google is already facing several antitrust motions across the world with the EU and Australia already having clamped down on anti-competitive practises and forced the company to shell out payments to third-party publishers.
Another lawsuit in the US is pending regarding the dissolution of Meta, which is the parent company of Facebook, Instagram and WhatsApp that the American government perceives as having a powerful hold over the market.