US Attorneys General Believe Meta, Alphabet's CEOs Were Aware of Alleged Deal to Control Ad Market

The lawsuit against the two American IT giants was originally filed in 2020, but many of its details remain sealed. The revelation comes as tech industry giants are facing increased scrutiny from the US authorities, and Meta specifically faces the risk of being forcibly split up into smaller companies.

The CEOs of Meta (former Facebook) and Alphabet (parent company of Google) were aware of the deal to cooperate on the advertisement market to control and manipulate prices on it in alleged violation of US law, newly revealed documents from the lawsuit against the two companies have shown.

According to the lawsuit, filed by the attorneys general of several US states, Meta's CEO Mark Zuckerberg was included in the 2018 email thread, in which the company's chief operating officer, Sheryl Sandberg, discussed the deal with Alphabet. Zuckerberg also received an email directly addressed to him once the deal was hammered out, the lawsuit says. The prosecution believes that Alphabet CEO Sundar Pichai also knew about the deal and approved it.

The companies challenged the claims made in the lawsuit. Alphabet's spokesperson insisted that while the deal was no secret, it doesn't necessarily mean that Pichai approved it.

"We sign hundreds of agreements every year that don’t require CEO approval, and this was no different", Alphabet's spokesperson said,

Meta's spokesperson stated that the deal reviewed in the lawsuit was no different from other agreements that the company struck with other ads bidding platforms and actually facilitated competition instead of hampering it as the authors of the lawsuit claim.

"These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all", the spokesperson said.

The US state attorneys general claim that Alphabet sought to exercise control over the prices and sales on the advertisement market, inflating costs for the clients via an agreement with then-Facebook (currently known as Meta).

"Google pocketed the difference between what it told publishers and advertisers that an ad cost and used the pool of money to manipulate future auctions to expand its digital monopoly", the lawsuit describes the scheme.

The litigation, launched back in December 2020, continues as both companies face scrutiny in various areas: from voluntary moderation (or lack thereof) of the content on their platforms to their alleged monopolist positions on the market. Meta, for one, is facing the threat of being broken up due to the share of the market it holds, with the US government seeking to strip the company of its WhatsApp and Instagram divisions.