Why Facebook Couldn’t Compete with Google: ‘It’s Sitting Between Us and the Views We Want’

Meta Platforms Inc. struck a deal with Google in 2018 after concluding it could not effectively compete with the search giant because of the company’s monopoly on the technology that underpins online display advertising. A former Facebook advertising executive testified in the U.S. Department of Justice’s antitrust trial.

Brian Boland, who led Facebook’s ad technology from 2009 to 2019, told a federal court in Virginia that the social network initially aimed to directly challenge Google in the market for display ads sold on websites. The Facebook Audience Network was intended to allow marketers to show ads on the company’s social networks, Facebook and Instagram, as well as buy them on websites and apps.

But in 2017, Facebook concluded it would have difficulty effectively competing with Alphabet Inc.’s Google because of its “monopoly” and the advantage the search giant offers in its advertising tools.

“Google stands between us and the impressions we want to buy,” he wrote in a July 2017 strategy note about Facebook Audience Network. Google’s tools give him “the ability to choose the best deal.”

“Knowing that between us” and advertisers “was cause for concern,” Boland told Judge Leonie Brinkema, who will rule on Justice Department charges that Google illegally monopolized ad technology markets. Google’s ad exchange gave her what’s known as a “last look” at online auctions, allowing the company to decide after an ad has been auctioned off that it wants to buy it.

Boland compared the technique to Google picking the 30 best apples from a crate before anyone else has a chance to buy them.

“You have leftovers,” Boland said.

Boland oversaw six months of negotiations between Facebook — which changed its corporate name to Meta Platforms in 2021 — and Google on a deal that was ultimately signed in 2018. The agreement, internally called Jedi Blue, gave Facebook preferential treatment when bidding through Google’s exchange for ads on web or mobile apps as part of the Facebook Audience Network.

The deal between Google and Facebook, the two largest players in the online advertising market, was approved at the highest levels of both companies, with Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai personally confirming it.

Details of the Facebook-Google deal, officially called the “Network Bidding Agreement,” were not disclosed in court filings Friday. However, documents presented in court said Google “expects Facebook to pay 15% of the media costs to eliminate” the last-look advantage.

The group of state attorneys general who sued Google in 2020 for allegedly monopolizing the ad technology market initially said the companies’ agreement violated antitrust law. They alleged that Google offered Facebook the deal in exchange for the social media company abandoning plans to adopt a new type of technology, known as header bidding, that would undermine Google’s monopoly.

A New York judge dismissed those allegations, saying there was “nothing inexplicable or suspicious” about what prompted the companies to strike the deal. European antitrust enforcers, who were also looking into the deal, closed their investigation in March 2022 without taking any action.

When the Justice Department sued Google last year for monopolizing the ad tech market, it did not find the deal anticompetitive but stressed that even a tech giant the size of Meta could not compete.

Boland, who left Facebook in 2020, said he expressed internal concerns about the lack of growth in the Facebook network’s online display advertising business. The project eventually stopped buying display ads on the network, instead shifting its focus entirely to mobile ads.