Google has filed a motion to dismiss the antitrust complaint filed last week, which alleges it colluded with Facebook to manipulate programmatic ad markets.
“State Plaintiffs’ complaint — cheered on by a handful of Google’s rivals who have failed to invest properly, compete successfully, or innovate consistently — might serve the narrow interests of those rivals,” Google argues in the motion, “but it also threatens to stifle the dynamism that drives Google and other firms to deliver the products on which businesses and consumers depend every day.”
Originally filed in November, the antitrust suit has been led by Texas attorney general Ken Paxton of Texas and has gradually revealed more allegations through a series of revised complaints. The complaint filed last week provided particularly specific details about Google’s alleged collusion with Facebook, including a project nicknamed “Jedi Blue” that the suit says intended to limit ad header bidding practices.
The new complaint relies 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 COO Sheryl Sandberg. But Google has denied that the deal involved any anticompetitive 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 doesn’t think they meet the legal standard to bring the case to trial. “The complaint misrepresents our business, products and motives, and we are moving to dismiss it based on 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 this claim is incorrect, “and AG Paxton offers no evidence to prove otherwise.” The company also disputes allegations that it has held back rivals from using its Open Bidding program and that it rigged ad auctions to favor Facebook. In addition, Cohen says, the lawsuit is based on outdated information “that bears no correlation to our current products or business.”
The new complaint quoted a 2015 email in which “Google employees expressed fear that Google’s exchange might ‘actually have to 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 as part of Jedi Blue, which gave Facebook an advantage in auctions.
In its motion to dismiss, Google argues that the lawsuit does not illustrate any anticompetitive conduct. “Despite amassing a lengthy collection of grievances, each one comes down to a plea for Google to share its data or to design its products in ways that would help its rivals,” the motion states. “The Sherman Act requires no such thing. None of the conduct alleged in the [complaint] falls into the narrow exception to the general rule that any firm may choose with whom it will deal, and courts are rightly skeptical of challenges to how a company designs its own products, especially when innovation creates more choices for consumers.”
Google also disputes Paxton’s claim that the company secretly colluded with the Facebook Audience Network via its Open Bidding agreement, with Cohen noting that the agreement is not exclusive and that it “announced FAN’s participation as one of over 25 partners in our Open Bidding program, all of whom have signed their own agreements to participate.”
Cohen added that Facebook participating in the agreement benefits advertisers and publishers. “In fact, if FAN weren’t a part of Open Bidding, AG Paxton may have claimed we were preventing a rival from accessing our products and depriving publishers of additional revenue,” he wrote in the post.
Correction, 7:46PM ET: Sheryl Sandberg is COO of Meta, not CFO. We regret the error.