A 2018 advertising pact between Alphabet Inc’s Google and Meta Platforms Inc does not contravene antitrust law because it does not restrict Facebook from using rival ad exchanges, Google’s attorney told a federal judge.
Texas and a group of other US states sued Google over the agreement, nicknamed Jedi Blue, as well as other anticompetitive conduct that they said allowed the search giant to monopolize the market for the technology to buy, sell and service online advertising.
Google and Meta, which is not a defendant in the case, have defended the agreement and denied any wrongdoing.
Photo: Reuters
“The written agreement itself has nothing unlawful in it,” Eric Mahr, an attorney for Google, said on Wednesday at a hearing in a Manhattan federal court.
The deal expanded competition because it allows Facebook to bid on ads being sold through Google’s ad exchange on behalf of Web sites or mobile apps within its Facebook Audience Network, he said.
However, Ashley Keller, a lawyer representing Texas, said that Google entered into the deal to give Meta advantages on the exchange it runs to buy and sell advertising.
In exchange, the social media company abandoned plans to adopt a new type of technology that would have undercut Google’s online advertising monopoly, he said.
“They were smart enough not to write down their agreement that could result in criminal sanctions,” Keller said. “Nobody wants to go to jail and wear an orange jumpsuit.”
Google has asked Judge P. Kevin Castel to dismiss the antitrust suit, saying that all of the conduct that the states target is legal.
“Google does not have to design any of its products to take into account the interests of rivals,” Mahr told Castel on Wednesday, adding that the states “want to turn Google into an ad tech utility.”
However, Keller said that Google has consistently taken steps to make it harder for rivals to compete, such as manipulating auctions for online advertising to ensure Google’s products end up winning.
When those efforts did not succeed, Google would buy off the competition, as it did with Meta, he said.
The Google-Meta pact, first made public in the states’ suit, is now also under investigation by regulators in Europe and the UK.
“There are privileges that Google gives to its own buying tools,” Keller said. “It’s just naked anticompetitive behavior to make sure others can’t disrupt the monopoly.”
Castel, who asked dozens of questions about Google’s ad tech tools and the online advertising market during the two-hour hearing, said the arguments were “helpful,” but did not indicate how he might rule, or when.
Lawyers for the US Department of Justice — which sued Google in 2020 for allegedly monopolizing the search market and is separately probing the company’s ad tech business — attended Wednesday’s hearing.
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