28 December 2020

The Wall Street Journal: “Google, Facebook Agreed to Team Up against Possible Antitrust Action, draft lawsuit says”

The redacted lawsuit filed last week makes no mention of Facebook Chief Operating Officer Sheryl Sandberg. According to the draft version, Ms. Sandberg signed the deal with Google. The draft version also cites an email where she told CEO Mark Zuckerberg and other executives: “This is a big deal strategically.”

The final version of the lawsuit didn’t make public details about the deal’s value. The draft states that starting in the deal’s fourth year, Facebook is locked into spending a minimum of $500 million annually in Google-run ad auctions. “Facebook is to win a fixed percent of those auctions”, the draft version says. The lawsuit says “Facebook is to [REDACTED].”

According to the draft version, an internal Facebook document described the deal as “relatively cheap” when compared with direct competition, while a Google presentation said if the company couldn’t “avoid competing with” Facebook, it would collaborate to “build a moat”. The redacted lawsuit filed last week doesn’t include those quotes.

Ryan Tracy & John D. McKinnon

A classic case of collusion – and a big vulnerability for Google in this lawsuit, because agreements to fix prices can be easier to prove than the states’ other accusations, as the article notes further down the line. At the end of a difficult year, US regulators finally taking action against the market concentration in Big Tech can surely be counted as one of the positive developments of 2020.

On this episode of The Prof G Show, Scott Galloway dives into the role monopolies play in the United States and discusses everything you need to know about antitrust in 2020

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