As per the antitrust case against Google in Texas, the company colluded with Facebook for several years to bypass Apple’s privacy measures to identify users and ensure that its ad exchanges always won auctions. In an amended complaint filed on October 22, a ‘Jedi’ project is detailed which was the name of Google’s plan to ensure that its ad exchanges always won against the thread of header bidding.
Google and Facebook’s ‘Jedi Blue’ plan worked against publishers
Google and Facebook colluded and formulated a plan called ‘Jedi Blue’ which would allow them to work together and set up quotes for how often Facebook would win publishers’ auctions, as per a report by The Register.
Header bidding is an advanced programmatic advertising technique that competes against Google’s waterfall method, which allows publishers to earn more money from ads. This method allows publishers to offer ad space to multiple ad exchanges, allowing the highest bidding ads to appear. For obvious reasons, Google has been outspoken against header bidding, citing performance issues on websites that utilize the method, however, the method has gained massive popularity over the past years.
As per the amended complaint, Google realized that header bidding threatened its core ad business, which is its bread and butter, and put it at a disadvantage in a market that it basically leads.
“Google quickly realized that this innovation substantially threatened its exchange’s ability to demand a very large – 19 to 22 percent – cut on all advertising transactions. Header bidding also undermined Google’s ability to trade on inside and non-public information from one side of the market to advantage itself on the other – a practice that in other markets would be considered insider trading or front running.”
Google publicly worked with this method and allow publishers to sell their ad inventory to more than one exchange, however, it ensured that its own ad exchange won despite having lower bids.
“However, Google secretly made its own exchange win, even when another exchange submitted a higher bid,” the amended complaint says. “Google’s codename for this program was Jedi – a reference to Star Wars.”
“And as one Google employee explained internally, Google deliberately designed Jedi to avoid competition, and Jedi consequently harmed publishers. In Google’s words, the Jedi program ‘generates suboptimal yields for publishers and serious risks of negative media coverage if exposed externally.'”
The complaint also claims that Google worked with other companies to hold back child privacy protections proposed by the FTC, and even tried to involve Microsoft to stifle competition.
Google and Facebook integrated their SDKs to ensure that both companies can pass user data to each other, and reduce the revenues for publishers. One of the aims was to bypass the privacy protections that Apple’s Safari browser offers on iOS devices, such as the prevention of cross-site tracking.
The companies also have been working together to improve Facebook’s ability to recognize users using browsers with blocked cookies, on Apple devices, and on Apple’s Safari browser, thereby circumventing one Big Tech company’s efforts to compete by offering users better privacy.
This is not the only antitrust case against Google, as it also faces an antitrust lawsuit by 36 U.S. states for alleged Play Store abuse.