• Two parallel probes will look into “Jedi Blue” deal between Google and Facebook, signed in 2018
• Companies defended themselves and said it was a non-exclusive agreement
Antitrust regulators in the European Union and the United Kingdom have opened probes into Alphabet ,Inc’s. (GOOGL) Google and Meta Platforms ,Inc .FB) over a 2018 ad deal.
The two parallel probes, announced Friday, will investigate the so-called “Jedi Blue” agreement between the two tech giants and whether the deal weakened competition in the online advertising market.
The deal, signed in September 2018, allegedly gave the social media giant an advantage in Google’s online advertising publishing system by rigging the auctions and illegally fixing prices.
In January, news reports from the Wall Street Journal and Politico said a lawsuit was filed by a group of U.S. state attorneys generals in 2020, alleging Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg were personally involved in approving the ad agreement.
Since the lawsuit was filed, Facebook has rebranded its parent company as Meta. Meta isn’t a defendant in the case.
Both companies rejected the claims at the time.
UK antitrust probe
“We’re concerned that Google may have teamed up with Meta to put obstacles in the way of competitors who provide important online display advertising services to publishers,” Andrea Coscelli, the chief executive of Britain’s Competition and Markets Authority (CMA), said in a statement Friday.
“If one company has a stranglehold over a certain area, it can make it hard for start-ups and smaller businesses to break into the market – and may ultimately reduce customer choice.”
CMA said it wants to determine whether the companies have restricted or prevented the uptake of “header bidding services,” which enable online content publishers to sell their advertising space to multiple buyers at the same time, rather than receiving offers individually.
European Commission probe
“Many publishers rely on online display advertising to fund online content for consumers,” Margrethe Vestager, the executive vice president in charge of competition policy for the European Commission, said in a statement.
“Via the so-called ‘Jedi Blue’ agreement between Google and Meta, a competing technology to Google’s Open Bidding may have been targeted with the aim to weaken it and exclude it from the market for displaying ads on publisher websites and apps,” Vestager said.
She also added that if the investigation found that the deal is restricting and distorting competition in the already concentrated ad tech market, it would be detrimental to rival ad serving technologies, publishers and ultimately consumers.
Comments from Google and Meta
A spokesperson from Meta said the company’s “non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms have helped to increase competition for ad placements.”
“We will cooperate with both inquiries,” Meta said.
“The allegations made about this agreement are false. This is a publicly documented, procompetitive agreement that enables Facebook Audience Network (FAN) to participate in our Open Bidding program, along with dozens of other companies,” Google said in a statement.
Picture Credit: Al Arabiya