Is There A "Secret" Agreement Between Google And Facebook?

At the beginning of last December, Facebook faced a lawsuit for the acquisition of the WhatsApp and Instagram platforms, being accused of monopoly in the social networks sector. Shortly after, in the same month, it would be Google's turn, which is accused of a monopoly in the internet advertising market. Although both cases are not related to each other, the latter involves both companies in an unknown agreement related to programmatic advertising technology.

New Technologies In The Sale Of Advertising Space

Header Bidding emerged in 2017 in opposition to the monopoly held by Google. This renewed approach to advertising offers parties a clearer view of the available spaces and the scope they could have by advertising in them. Thanks to Header Bidding, publishers can create a bidding situation between multiple buyers in real-time, instead of selling their inventory to a single buyer. This allows the publisher to sell their advertising inventory at the highest possible price.

Before the advent of Header Bidding, automated ad space trading worked relatively ineffectively with the cascade system: offers for an ad were sent to each ad network in a staggered fashion within the ad server. If the first network was not interested in buying the ad space, the offer was sent to the next and so on until it was finally bought or not.

In order not to be left behind, Google developed the Open Bidding platform that also offers strong control over the supply and demand process of the spaces to be advertised. Open Bidding allows advertisers to bid in real-time via a unified auction, and for any impression, the winner is the highest paying advertiser as all networks have the same priority (including Google).

In 2017 Facebook decided to opt for Header Bidding, which was a blow for Google as it was the leading company in the online advertising market. However, at the end of 2018, Facebook backed off and decided to join Google and its Open Bidding, causing the strangeness of many in the market. If these great online advertising giants came together, the result would be that advertisers would have access to millions of potential consumers for their ads.

The Questioned Blue Jedi Deal

With the abrupt change in Facebook's decision, suspicions of a possible agreement between the two giants arose, which materialized in December 2020 when a series of lawsuits against Google by 10 US states began. And it is that this agreement supposes a favorable treatment towards Facebook on the part of Google, as well as the monopolization of the market.

"Concessions towards the social network [Facebook] in exchange for its cooperation and assistance in case of an investigation [on Google]."

The information on the draft of this agreement was published by The New York Times, and in it appear a series of concessions towards the social network in exchange for its cooperation and assistance in case of an investigation, as well as the cessation of rivalries between both giants. The favoritism towards Facebook results in great disadvantages for the rest of the participants in the Open Bidding service.

Consequences of the "association" between Google and Facebook

Among the concessions that Google would have made to Facebook is a long time to bid in advertising bids. While the other participating companies have around 160 milliseconds, Facebook would get almost double with 300 milliseconds of time. Likewise, all Open Bidding participants have Google as an intermediary, which controls the information on prices and bids won by each site.

If the deal occurs, Facebook would have a direct billing relationship with the website where it advertises, allowing complete clarity on the prices and earnings of its offers. In addition, both companies agreed that Google would help identify the behavior of 80% of mobile users and 60% of computer users who received Facebook advertising. The assistance that apparently no other participant in this service has.

But the most worrying advantage would be the supposed determination of a fixed number of offers for the social network, that is to say, that regardless of the offer made by the other companies, the auction would be in favor of Facebook. The agreement would also stipulate that Zuckerberg's company would be present in at least 90% of the auctions where the target user identifies and would spend around $ 500 million on advertising, approximately 400 million euros during the first four years of the Blue Jedi.

" Zuckerberg's company would be present in at least 90% of the auctions where the target user identifies and would spend around $ 500 million on advertising."

Spokesmen for both companies have denied the existence of concessions of this type, claiming that the agreement is equivalent to that of the other companies. Even so, with all the information brought to light by the New York Times, the suspicion is only settling. We will remain attentive to how this legal process is developed, which is faced by the default browser of many, and how it affects the digital field.