Yahoo Finance UK and EU open antitrust probes into Google and Meta over online ads
UK and EU antitrust authorities launched parallel probes into Google (GOOG) and Meta (FB), formerly Facebook, over a deal between the two for online display advertising services.
The UK’s Competition and Markets Authority (CMA) and the European Commission are concerned that the the so-called “Jedi Blue” deal hampered competition in markets for online display advertising services.
Under the 2018 deal the companies agreed that Meta’s Audience Network would participate in Google’s Open Bidding program.
Online display ads are graphic ads that appear on websites, mobile apps and social media.
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Andrea Coscelli, head of the CMA, said in a statement: “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.”
“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,” he added.
The CMA said it is specifically looking into whether the firms restricted or prevented the uptake of header bidding services.
Header bidding is a service which allows sellers, such as news publishers, to offer their online advertising space to multiple buyers at the same time, rather than one by one.
Buyers or advertisers therefore compete against each other for advertising space, allowing publishers to compare bids from a range of bidders.
"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," EU competition chief Margrethe Vestager said in a statement.
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"If confirmed by our investigation, this would restrict and distort competition in the already concentrated ad tech market, to the detriment of rival ad serving technologies, publishers and ultimately consumers,” she added.
Companies found in breach of EU law stand to lose up to 10% of global revenues but the legal processes could take years.
The Jedi Blue deal is already under investigation in the US, where 15 state attorneys general have filed lawsuits against the two companies.
Rocio Concha, Which? director of policy and advocacy, said: “It is right that the regulator is prepared to investigate this potential abuse of power. The overwhelming market power that Google and Meta hold in digital advertising markets is bad for consumers if it pushes up the cost of advertising and leads to them facing higher prices.
“The government needs to legislate to empower the Digital Markets Unit as soon as possible. Consumers and other businesses would be better served if the biggest tech firms were subject to a pro-competitive code of conduct that prevented harm from occurring in the first place, rather than acting retrospectively."
