They have the same customers and customers have a finite advertising budgets. When Facebook gets more Google data it benefits the "result" of the ads on facebook which in turn over time gets more $$ shifted there.
1. Who knows what data Google is giving back in return?
2. Neither want a monopoly. A duopoly is far more resistant to regulation.
3. Many business will advertise on multiple channels. So long as they edge out the others it's fine by them. They know they are the two premium outlets.
You are the product in both of these companies, why wouldn't they work together? Ethics, sure, but that won't stop them.