Lawsuit: Google, Facebook execs conspired to manipulate ad auctions

Details: While the suit itself deals with a range of Google practices, much attention has centered around its discussions with Facebook, particularly those around the automated method of buying and selling online ads known as "header bidding."

• With header bidding, publishers let many ad exchanges bid on their inventory at the same time before their ad servers release it to the highest bidder. This theoretically helps publishes sell more and at more competitive rates.
• The complaint essentially alleges that Google brokered a deal with Facebook to support its alternative to header bidding, called "open bidding."
• Header bidding was a threat to Google because it let publishers put their inventory out there to be bid on so that they could make more money, instead of forcing them to use Google's open bidding tech, in which Google would take a cut of the ad serving fees.

In one email, Facebook COO Sheryl Sandberg calls the work with Google "a big deal strategically" and at another point emails suggest CEO Mark Zuckerberg needed to approve the arrangement.

• "Google CEO Sundar Pichai also personally signed off on the terms of the deal," according to the suit.
• The suit also cites a 2015 email in which "Google employees expressed fear that Google's exchange might ‘actually have to compete’ with other ad exchanges."
• The latest version of the lawsuit can be found here (PDF).

Flashback: Paxton first announced he was taking Google to court in December 2020, accusing Google of abusing its market power to rig auctions for placing ads and drive up online advertising pricing.

• Paxton is leading the suit, joined by a number of other Republican state AGs.
• That initial suit accused Google of striking up a secret agreement with Facebook to avoid competing with each other’s ad-tech businesses, though the specifics of the allegations were heavily redacted.

Be smart: A controversial figure in his own right, Paxton is separately facing claims from people who worked under him accusing him of bribery, abuse of office and other offenses. He also led the failed multistate effort to have the Supreme Court invalidate election results in crucial swing states and hand the 2020 election to President Trump.

What they're saying: "The unredacted complaint in the ad tech suit should put to rest the argument that Google wins just because its products are 'better,' " said David Chavern, CEO of the News Media Alliance, a trade group that represents thousands of newspapers.

• "Anti-competitive side deals and market manipulation don't count as innovation. Google has been purposely suppressing news publishers' finances for years and then asking us to say thank you," he added.

The other side: The companies, meanwhile, take issue with the notion that their effort was either secret or improper.

• "We sign hundreds of agreements every year that don't require CEO approval, and this was no different," a Google representative said in a statement. "And contrary to AG Paxton's claims, the fact of this agreement was never a secret — it was well-publicized."
• "Meta's non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements," a Meta spokesperson said in an email. "These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all."