UK and EU regulators have opened investigations into tech giants Google and Meta over concerns the firms broke competition rules for online display advertising services.
The Competition and Markets Authority (CMA) and European Commission announced parallel probes into the “Jedi Blue” agreement between the firms, amid worries this impacted competition.
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 receiving offers one by one.
Buyers or advertisers therefore compete against each other for advertising space, allowing publishers to compare bids from a range of bidders.
The watchdogs said they are scrutinising a September 2018 agreement, which Google code-named “Jedi Blue”, allowing Meta’s audience network to work alongside Google’s open bidding programme.
The European Commission said it is concerned this link-up may have led to the exclusion of tech advertising services from competing with Google’s bidding programme, and therefore restricting competition in the display advertising market.
Margrethe Vestager, executive vice-president at the European Commission 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.”
🔎 We’re investigating #Google and #Meta’s ad-tech agreement to see if they have broken competition law.— Competition & Markets Authority (@CMAgovUK) March 11, 2022
We’re concerned it may restrict competition in markets for online display #advertising services.
Read more: https://t.co/v8iAV2mjUb pic.twitter.com/GnJ6gs1QiF
Andrea Coscelli, chief executive of the CMA, 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.
“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.”