Facebook Inc. FB -2.09% and Alphabet Inc.’s GOOG -0.91% Google agreed to “cooperate and assist one another” if they ever faced an investigation into their pact to work together in online advertising, according to an unredacted version of a lawsuit filed by 10 states against Google last week.
The suit, as filed, cites internal company documents that were heavily redacted. The Wall Street Journal reviewed part of a recent draft version of the suit without redactions, which elaborated on findings and allegations in the court documents.
Ten Republican attorneys general, led by Texas, are alleging that the two companies cut a deal in September 2018 in which Facebook agreed not to compete with Google’s online advertising tools in return for special treatment when it used them.
Google used language from “Star Wars” as a code name for the deal, according to the lawsuit, which redacted the actual name. The draft version of the suit says it was known as “Jedi Blue.”
The lawsuit itself said Google and Facebook were aware that their agreement could trigger antitrust investigations and discussed how to deal with them, in a passage that is followed by significant redactions.
The draft version spells out some of the contract’s provisions, which state that the companies will “cooperate and assist each other in responding to any Antitrust Action” and “promptly and fully inform the Other Party of any Governmental Communication Related to the Agreement.”
In the companies’ contract, “the word [REDACTED] is mentioned no fewer than 20 times,” the lawsuit says. The unredacted draft fills in the word: Antitrust.
A Google spokesperson said such agreements over antitrust threats are extremely common.
The states’ “claims are inaccurate. We don’t manipulate the auction,” the spokesperson said, adding that the deal wasn’t secret and that Facebook participates in other ad auctions. “There’s nothing exclusive about [Facebook’s] involvement and they don’t receive data that is not similarly made available to other buyers.”
The redacted lawsuit filed last week makes no mention of Facebook Chief Operating Officer Sheryl Sandberg. According to the draft version, Ms. Sandberg signed the deal with Google. The draft version also cites an email where she told CEO Mark Zuckerberg and other executives: “This is a big deal strategically.”
Like Google, Facebook has also disputed the allegations in the lawsuit, saying its agreements for bidding on advertising promote choice and create clear benefits for advertisers, publishers and small businesses.
“Any allegation that this harms competition or any suggestion of misconduct on the part of Facebook is baseless,” a Facebook spokesperson said.
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