Google and Facebook owner Meta are being investigated in the UK and EU over concerns they put “obstacles” in the way of rival ad tech providers.
The UK’s Competition and Markets Authority and the European Commission launched the investigations into whether the tech giants broke UK and EU law when they teamed up to deliver online display advertising services.
The watchdogs are looking at Jedi Blue, Google’s internal codename for the agreement which launched in 2018, to decide if it restricted or prevented the uptake of header bidding services.
Header bidding, which has been widely adopted since about 2015, is a service that allows sellers such as news publishers to offer their online ad space to multiple buyers at the same time.
Buyers or advertisers therefore compete against each other for ad space, allowing publishers to compare bids from a range of bidders.
The Facebook Audience Network, which participates in auctions for publishers’ ad space using Google’s and rivals’ ad tech services, was one of several partners with Google but the European Commission said their link-up may have excluded rivals competing with Google’s Open Bidding programme.
The Commission said it had concerns therefore that it would “restrict or distort competition in markets for online display advertising, to the detriment of publishers, and ultimately consumers”.
Jedi Blue is already being investigated in a Texas antitrust suit. The tech companies both deny the allegations against them.
The European Commission’s executive vice-president Margrethe Vestager, who is in charge of competition policy, said: “Many publishers rely on online display advertising to fund online content for consumers. 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.
“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.”
The CMA said it would also look at Google’s header bidding services more widely to see if it “abused a dominant position and gained an unfair advantage over competitors trying to provide a similar service”.
If it finds Google or Meta broke competition law it could impose a fine of up to 10% of company turnover and issue legally binding directions forcing the behaviour that is in breach to end.
CMA chief executive Andrea Coscelli said: “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.”
The CMA is currently preparing for the introduction of the Digital Markets Unit, which will allow the watchdog to govern the relationship between platforms and publishers with a code of conduct.
Coscelli said: “We will not shy away from scrutinising the behaviour of big tech firms while we await powers for the Digital Markets Unit, working closely with global regulators to get the best outcomes possible.”
In response to the UK and EU investigations, a Meta spokesperson said: “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.
“These business relationships enable Meta to deliver more value to advertisers and publishers, resulting in better outcomes for all. We will cooperate with both inquiries.”
A Google spokesperson 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.
“FAN’s involvement is not exclusive and they don’t receive advantages that help them win auctions. The goal of this program is to work with a range of ad networks and exchanges to increase demand for publishers’ ad space, which helps those publishers earn more revenue. Facebook’s participation helps that. We’re happy to answer any questions the Commission or the CMA have.”
Picture: Reuters/Dado Ruvic/Illustration
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