Google has filed a motion to dismiss the antitrust lawsuit filed last week, which accuses it of colluding with Facebook to manipulate programmatic ad markets.
“The state plaintiffs’ complaint — acclaimed by a handful of Google rivals who have failed to invest properly, compete successfully, or innovate consistently — could serve those rivals’ narrow interests,” says Google in the motion, “but it also threatens to stifle the momentum that drives Google and other companies to deliver the products that businesses and consumers depend on every day.”
Originally filed in November, the antitrust lawsuit was led by Texas Attorney General Ken Paxton of Texas and gradually uncovered more allegations through a series of revised complaints. The lawsuit filed last week provided particularly specific details about Google’s alleged collusion with Facebook, including a project dubbed “Jedi Blue” that the lawsuit said was aimed at limiting ad header bidding practices. .
The new complaint is based on internal emails that show the Jedi Blue deal was reviewed with input from Google CEO Sundar Pichai and Meta/Facebook CEO Mark Zuckerberg and CFO Sheryl Sandberg. But Google has denied the deal involved anti-competitive behavior and says it was approved without Pichai’s direct approval.
Adam Cohen, director of economic policy at Google, wrote in a blog post accompanying the new response that the allegations are “more heat than light” and that Google does not believe they meet the legal standard for carrying the court case. “The complaint misrepresents our business, our products and our motives, and we are preparing to dismiss it due to its failure to offer plausible antitrust claims,” he wrote in the post.
At the heart of the lawsuit is the allegation that publishers are forced to use Google’s ad server to access its ad exchange. But Google says that claim is incorrect, “and AG Paxton offers no evidence to prove otherwise.” The company also disputes allegations that it blocked rivals from using its Open Bidding program and rigged ad auctions to favor Facebook. Additionally, Cohen says, the lawsuit is based on outdated information “that has no correlation to our current products or activities.”
The new complaint cited a 2015 email in which “Google employees expressed concern that Google’s exchange might ‘in fact compete’ with other exchanges at some point in the future.” A newly unredacted section of the complaint also alleges that Google made concessions to Facebook under Jedi Blue, which gave Facebook an advantage in the auction.
In its motion to dismiss, Google argues that the lawsuit does not illustrate anti-competitive behavior. “Despite the accumulation of a long collection of grievances, each boils down to a plea for Google to share its data or design its products in a way that helps its rivals,” the motion reads. “The Sherman Act requires no such thing. None of the conduct alleged in the [complaint] falls within the narrow exception to the general rule that any company can choose who it will deal with, and the courts are rightly skeptical of the challenges posed to the way a company designs its own products, especially when the innovation creates more choices for consumers.
Google also disputes Paxton’s claim that the company secretly colluded with the Facebook Audience Network through its Open Bidding deal, with Cohen noting that the deal is not exclusive and that he “announced participation of FAN as one of more than 25 partners in our Open Bidding program, all of whom have signed their own participation agreements.
Cohen added that Facebook’s participation in the deal benefits advertisers and publishers. “In fact, if FAN were not being part of Open Bidding, AG Paxton may have claimed that we were preventing a competitor from accessing our products and depriving publishers of additional revenue,” he wrote in the post.