How Facebook and Google rigged ad markets

New unredacted evidence reveals that Facebook and Google CEOs knew about the Jedi Blue ad-rigging scheme.

(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Google and Facebook are dominant in digital ads.

The internet giants — officially (but annoyingly) called Alphabet and Meta — receive 52%+ of digital ad spend, per eMarketer.

As if this duopoly position isn’t enough, court documents from a recent lawsuit show that the firms rigged ad markets.

What happened?

In December 2020, 14 state attorneys general sued Alphabet for “anticompetitive conduct” that took place in 2018.

According to Marketwatch, the scheme was called Jedi Blue and involved Google giving Facebook a boost by providing:

  • A “Google-managed” system to bid on and manage ads
  • Preferential rates on ads
  • The 1st “dibs” on prime ad placements

These details were previously known, but new unredacted evidence made a big reveal:

The CEOs of both companies knew

Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai broke the 1st rule of collusion: Don’t leave a paper trail!

Why would Google help Facebook out?

The social network planned to expand into header bidding, a type of programmatic advertising that threatened Google’s ad exchange. So, Google made “overtures” to keep Facebook at bay.

The states are actually suing Google for a number of ad-rigging schemes. If regulators win one (or more) cases, the duopoly may be just a bit less dominant.

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Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

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