We have known for a few weeks that a secret agreement would have been exchanged between Facebook and Google in 2018. The latter, called “Jedi Blue”, concerns the advertising auctions offered by Mountain View Facebook. An illegal agreement that would have allowed these two mastodons of the web establish their monopoly in the online advertising industry. In a report entitled “Behind a Secret Deal Between Facebook and Google”, the New York Times reveals documents obtained from the U.S. judiciary during the Texas trial.
Facebook would clearly have benefited from the “Jedi Blue” deal
We can read in the New York Times when : “The contract with“ Jedi Blue ”would have given Facebook an advantage in the field of online advertising. The terms that Google Facebook offers gave the social media giant unprecedented benefits. Facebook had more time to bid on most auctions, and Google provided Facebook with confidential information about the audience. As part of this illegal agreement, Facebook had promised to position itself on at least 90% of the auctions as soon as he could identify the audience “.
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Facebook would therefore have spent at least $ 500 million per year under the “Jedi Blue” contract. According to New York Times, other Google advertising partners could never have got so much. Mountain View firm deliberately favored the social media giant by guaranteeing it a certain amount of advertising revenue. According to the American newspaper, there is therefore unfair competition. For now the two web giants reject this theory and claim that the Jedi Blue deal was not anti-competitive.
The two giants had expected a possible antitrust investigation
According to a Facebook spokesperson: “This agreement with Google made it possible to increase competition in advertising auctions.”. For its part, Google claims that: “Texas Lawsuit Distorts Business As Well As Other Aspects Of Our Advertising Business”. However, we know from a paper dated December 29th, that of the Wall Street Journal that the transaction fees Facebook owed Google was 5 to 10% while they were revolve around 20% for other advertisers.
The New York Times also notes that: “A clause in the ‘Blue Jedi’ agreement stipulated that the two giants must work together and support one another in an investigation into their practices. We can also see the agreement mentioned the term antitrust law at least 20 times“” . It is therefore not surprising that Texas and the US Department of Justice are using the “Jedi Blue” treaty to justify an action against Facebook and Google. Even if Facebook and Google believe that they are in their right …
Ken Paxton, the Texas attorney general, summed it up pretty well in one sentence. He explains, “If the market were a baseball game, Google would be the pitcher, the batsman and the referee …”. Since auction manipulation is illegal in the USA, The process could be speedy. Let’s see if Facebook and Google’s lines of defense evolve.