Google and Meta are under investigation by antitrust regulators in the EU and UK over “Jedi Blue,” a deal between the two companies that critics say allowed them to block smaller tech companies from gaining a foothold in the online advertising market.
in a Press release, the European Commission said it was concerned that the September 2018 deal “may be part of efforts to exclude ad technology services that compete with Google’s Open Bidding program and thereby restrict or distort competition in online display advertising markets. Therefore, it is opening a formal antitrust investigation.
The UK Competition Market Authority said it also investigating the dealwith CMA boss Andrea Coscelli stating: “We are concerned that Google has teamed up with Meta to put obstacles in the way of competitors who provide important online display advertising services to publishers.”
The Jedi Blue deal is done under investigation in the US, where 15 state attorneys general have filed lawsuits against the two companies. These multiple legal fronts have led to a slow trickle of details about both the deal and the prosecutors’ allegations. Court filings allege, for example, that Jedi Blue was reviewed and approved by senior executives at Google and Meta, including Sundar Pichai, Sheryl Sandberg, and Mark Zuckerberg.
Jedi Blue’s origins can generally be traced back to a decision by Meta (then Facebook) in 2017 to support an adtech system that would rival Google’s. Lawsuits in the US allege that Meta stopped supporting the technology in 2018 after Google offered the company preferential access to its bidding system for online ads. As part of the deal, Meta became first in line by buying ad real estate from Google and then stopped investing in rival ad tech systems.
It’s a somewhat complicated backstory, but the result, according to US prosecutors, is that the two companies worked together to save money and block rivals.
Although regulators are investigating both Meta and Google, the European Commission says Google alone may deserve the blame. Margrethe Vestager, head of EU competition, saying the financial times: “We have not yet concluded if it is something of Google alone or if they were together. It is not a fact that Meta was aware of the effects of the deal and that is what we have to investigate.”
Meta and Google saying Reuters that the EU and UK investigations were wrong.
Google said in a statement: “The allegations made about this deal are false. This is a publicly documented pro-competitive agreement that allows Facebook Audience Network (FAN) to participate in our Open Bidding program, along with dozens of other companies.”
Meta subsidiary Facebook said in a statement: “Meta’s non-exclusive bidding agreement with Google and similar agreements we have with other bidding platforms have helped increase competition for ad placements.”
If Meta or Google are found to be in breach of EU competition law, they could be fined up to 10 percent of their global annual revenue. However, the investigation is likely to take years to reach a conclusion and will give both companies plenty of opportunity to appeal any rulings.