Antitrust regulators in the EU and the UK are looking into “Jedi Blue,” a pact between the two giants that opponents believe enables them to prevent smaller tech businesses from entering the internet ad industry.
The European Commission expressed worry that the September 2018 deal “may constitute part of attempts to exclude ad tech providers competing with Google’s Open Bidding program, and thereby restrict or distort competition in markets for online display advertising,” according to a news release. As a result, it has launched a formal antitrust probe.
“We’re worried that Google may have linked up with Meta to put impediments in the path of competitors that supply essential online display advertising services to publishers,” CMA chairman Andrea Coscelli said.
In the United States, the Jedi Blue transaction is already being investigated, with 15 state attorneys general filing complaints against the two corporations. These several litigation fronts have resulted in a gradual flow of information regarding the agreement and the prosecutors’ allegations. According to court documents, key officials at Google and Meta, including Sundar Pichai, Sheryl Sandberg, and Mark Zuckerberg, evaluated and approved Jedi Blue.
The beginnings of Jedi Blue may be traced back to Meta (then Facebookdecision )’s in 2017 to develop an adtech system that would compete with Google’s. According to lawsuits filed in the United States, Meta abandoned the technology in 2018 when Google granted it preferred access to its online ad auction system. As part of the agreement, Meta was given first priority when purchasing ad space from Google, and it also agreed to stop investing in alternative adtech platforms.
It’s a convoluted tale, but the bottom line is that the two corporations collaborated to save money and keep competitors out, according to US authorities.
Despite the fact that regulators are looking into both Meta and Google, the European Commission believes that only Google is to blame. “We haven’t established yet if it’s a Google thing alone or if they were in it together,” EU competition commissioner Margrethe Vestager told The Financial Times. It’s not a given that Meta was aware of the deal’s consequences, and that’s something we’ll have to look into.”
The EU and UK inquiries, according to Meta and Google, were misdirected.
“The claims made concerning this arrangement are baseless,” Google stated in a statement. This is a publicly publicized, procompetitive arrangement that allows Facebook Audience Network (FAN), along with dozens of other organizations, to participate in our Open Bidding program.”
“Meta’s non-exclusive bidding deal with Google, as well as similar partnerships we have with other bidding platforms, have helped to enhance competition for ad placements,” Facebook, a Meta subsidiary, said in a statement.
If Meta or Google are found to be in violation of EU competition legislation, they might face fines of up to 10% of their annual global turnover. However, the inquiry is expected to take years to complete, giving both companies ample opportunity to challenge any decisions.