‘Jedi Blue’ ad deal between Google and Facebook sparks new antitrust probes in EU and UK – TechCrunch

The European Commission and the UK have announced parallel, formal antitrust investigations into Google and Facebook over their online display advertising businesses.

The twin investigations announced today by the EU competition division and the UK’s Competition and Markets Authority (CMA) focus on allegations of collusion between Google and Facebook (aka Meta) over a September 2018 internal agreement known as “Jedi Blue”. is accused of undermining a competing ad system (aka header bidding) in favor of Google’s open bidding system.

Have details of Jedi Blue appeared before through a US state antitrust lawsuits against Google’s advertising businessled by the state of Texas, which claims Google and Facebook faked one compensation Agreement to manipulate the market in their favor – by having Google grant Facebook preferential rates and a priority choice of premium ad placements in exchange for the social networking giant supporting its ad system and not developing competing ad technologies or using the competing publisher system header bidding .

The US lawsuit is ongoing, but the EU said today it is concerned that the ‘Jedi Blue’ deal “could be part of an effort to ban ad-tech services linked to the company’s open bidding program.” Compete with Google, and therefore restrict or distort competition in online display advertising markets, to the detriment of publishers and ultimately consumers.”

In a statement, EPP and EU competition chief Margrethe Vestager added: “Many publishers rely on online display advertising to fund online consumer content. Through the so-called “Jedi Blue” agreement between Google and Meta, a competing technology to Open Bidding may have been targeted by Google in order to weaken it and lock it out of the market for displaying ads on publisher websites and apps. If confirmed by our investigation, it would limit and distort competition in the already concentrated ad tech market, to the detriment of competing ad serving technologies, publishers and ultimately consumers.”

The UK regulator said its parallel inquiry would “consider whether an agreement between Google and Meta (formerly Facebook) – which Google internally code-named ‘Jedi Blue’ – breached the law… [and] also questioned[e] Google’s behavior in relation to header bidding services more comprehensively to determine whether the company has abused a dominant position and gained an unfair advantage over competitors attempting to offer a similar service.”

Andrea Coscelli, CEO of CMA, also commented in a statement: “We are concerned that Google may have partnered with Meta to create obstacles for competitors who offer publishers important online display advertising services. When a company has a stranglehold on a particular area, it can make it harder for startups and smaller companies to enter the market – and ultimately limit customer choice.”

European regulators are catching up on this specific ad scrutiny — and by extension, enforcement of the adtech duopoly.

Although the EU eventually launched a wide-ranging investigation into Google’s adtech last summer — a few years after a 2019 Prosecution against Google’s AdSense product as it fined the tech giant around 1.7 billion (EIN Decision Google is a calling.)

Meanwhile, the CMA started an in-depth market study of the online advertising sector back in 2019 – what went on Mark the danger area and complete in summer 2020 that a new regulatory approach and dedicated oversight are needed to address the “wide-ranging and self-reinforcing” concerns over market power of Google and Facebook, summarized in the report. Therefore, it has had solid concerns about the shape of the online advertising market for over a year.

“The concerns we have identified in these markets are so far-reaching and self-reinforcing that our existing powers are insufficient to address them,” she wrote in July 2020, as she called for “a new regulatory approach — one that would a one.” set of concerns simultaneously, with powers to act quickly to address both the sources of market power and its impact, and with a dedicated regulator able to monitor and adjust its interventions in light of evidence and changing market conditions.”

However, at the time of this final report, the CMA was reluctant to enforce Google and Facebook to address the systemic issues it identified. Instead, it deferred action in favor of urging a “Competitive” reform the country’s competition rules – to ensure that “concerns can be addressed quickly before irreversible competitive damage can occur”, as it was rather ironically put at the time; as well as urging that the dedicated Digital Markets Unit (DMU) be given powers “to increase interoperability and enable access to data, increase consumer choice and mandate the dissolution of platforms where necessary”.

This UK competition reform has yet to enact the necessary legislation to empower the DMU – which likely explains why the CMA decided to go ahead and now open an investigation against Jedi Blue under existing competition rules.

“We will not shy away from scrutinizing the behavior of major tech companies while we await powers for the Digital Markets Unit and work closely with global regulators to ensure the best possible outcome,” Coscelli noted in today’s statement.

The EU has a similar ex ante competition reform underway – also known as the Digital Markets Act – intended to impose operating and behavioral conditions on so-called “gatekeeper” platforms and will most likely apply to both Google and Facebook. But that’s not certain either. Since then, the EU has had a detailed proposal December 2020 but the draft law is still going through trilogues – and even if it is adopted by all EU institutions, there will be an implementation phase before the new regime applies, so again there will be no overnight legal reform of a systemically fractured market.

It is therefore notable that the EU and UK are coordinating their announcements of formal investigations into this common competition issue – implying some degree of joint work that can help speed up their parallel investigations, e.g. B. when they are able to find ways to share results or undertake other types of supportive work.

Although both today stressed that their respective investigations remain separate and independent, the EU noted: “As usual, the Commission has been in contact with the CMA and intends to cooperate closely on this investigation, in accordance with applicable rules and procedures.”

“The CMA will seek to work closely with the EC as the independent investigations develop,” added the British watchdog.

One thing to watch here will be how quickly the two investigations will be completed.

Under Vestager’s oversight, the EU has accelerated Big Tech’s competition investigations – with a number of enforcement decisions against Google under its oversight: Google shopping (2017), Android (2018) and Adsense (2019).

The CMA has also been preparing for the technology ahead of expected competition reforms. And was – lately – closely occupied with it with Google about an investigation into its privacy sandbox proposal.

Smarter collaboration between international regulators — including between European regulators and US attorneys-general, who have been prosecuting Google over this issue since 2020 — can also help speed scrutiny of an area of ​​technology that cuts across the digital sphere and consumers and businesses equally concerned , and which has been allowed to cloak itself in bewildering complexity for far too long.

However, it will be at least months before we see any results from this latest investigation.

The CMA’s investigation into Facebook’s acquisition of Giphy, for example, diminished June 2020 when his investigation was started until November 2021 when it ordered the deal reversed — and an M&A scrutiny is probably easier work than an antitrust investigation into adtech deals.

Google and Meta have been asked to comment on the dual antitrust investigation into Jedi Blue.

Google denied that the agreement with Meta gives Facebook’s Audience Network an advantage in open bidding auctions, and also dismissed any suggestion that the agreement restricted header bidding, claiming that the popularity of header bidding has increased since the launch of its open bidding systems have increased further.

The tech giant also sent this statement, which is attributed to a Google spokesperson:

“The claims made about this agreement are false. This is a publicly documented, pro-competitive agreement that allows the Facebook Audience Network (FAN) to participate in our Open Bidding program along with dozens of other companies. FAN’s involvement is non-exclusive and they receive no benefits to help them win auctions. The goal of this program is to work with a number of ad networks and exchanges to drive demand for ad space from publishers, which helps those publishers generate more revenue. The involvement of Facebook helps here. We are happy to answer any questions from the Commission or the CMA.”

Asked for comment, Meta also denied any wrongdoing – and sent this statement:

“Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms have helped increase competition for ad placements. These relationships allow Meta to deliver value to advertisers and publishers, resulting in better outcomes for everyone. We will cooperate on both requests.”

‘Jedi Blue’ ad deal between Google and Facebook sparks new antitrust probes in EU and UK – TechCrunch Source link ‘Jedi Blue’ ad deal between Google and Facebook sparks new antitrust probes in EU and UK – TechCrunch

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