The EU is at it again with questioning the operations of major social platforms, this time with support from the UK is launching an antitrust investigation towards Google and Meta. The specific deal in question is referred to as “Jedi Blue”, which the regulators have defined as being a deal between the two firms that critics say allowed them to block smaller tech companies from essentially entering the online ad market.
The Darkside Is Strong
The European Commission issued a press statement that expressed its concern about this supposed 2018 agreement. The statement reads “may form part of efforts to exclude ad tech services competing with Google’s Open Bidding program, and therefore restrict or distort competition in markets for online display advertising.”, leading up to the present antitrust investigation.
The UK’s Competition Market Authority was also supposedly looking into the deal, with CMA chief Andrea Coscelli stating: “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.”
“Jedi Blue” is also currently under investigation in the US, where 15 state attorneys have allegedly filed lawsuits against the companies involved. These multiple legal assaults have brought details about the deal and prosecutors’ accusations down to a crawl, with certain court filings insinuating that the deal was reviewed and approved by the top executives of both companies.
Jedi Blue’s origin can be traced back to 2017 when Meta (then Facebook) decided to support an ad tech system to rival Google. US lawsuits claim that Meta then dropped its support in 2018 in favor of Google’s offer to give it preferential access to its bidding system for online ads. Part of the deal ensured that Meta was given the top spot when purchasing ad real estate from Google, prompting an effective withdrawal of its support to all other ad tech systems. Backstories aside, the gist of the deal is that the two companies were in cahoots to save each other on costs and block out potential and emerging rivals.
Despite regulators investigating both Meta and Google, the EU Commission pushes that only Google is to blame. The EU’s competition chief Margrethe Vestager even partially defends Meta, saying that the company might not have been fully conscious of the deal’s effects.
The Wrap
Google and Meta have, of course, responded by saying that these ‘allegations’ were misguided, with Google being bold enough to say that “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.”
Likewise, Meta released a statement (via Facebook) saying “Meta’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.”
Both companies stand to suffer a loss of about 10% of their global annual revenue should investigations arrive at a conclusion that has Google and Meta breaching the EU’s competition law. This is one of those cases where the saying “The Bigger They Are, The Harder They Fall” accurately applies.
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