UK, EU regulators probe Google and Meta's 'Jedi Blue' ad deal

Watchdog: We're 'concerned' they 'teamed up ... to put obstacles in the way of competitors'

Google and Meta are facing scrutiny from UK and EU competition regulators over their infamous "Jedi Blue" ad-slinging deal.

Jedi Blue is the name Google gave to an agreement with Facebook (now Meta) over bidding for ad space. Header bidding is where sellers can offer online ad space to multiple buyers at the same time. Sellers can compare bids and buyers compete against each other for ad space.

The innovation of header bidding "promised to bypass Google's stranglehold on the exchange market," as detailed in a complaint filed in the US in a New York district court last year.

As a result, the complaint alleges, Google took steps to ensure its exchange would win, even when another submitted a higher bid. When Facebook looked set to throw its weight behind header bidding, Google made a deal with the company in a September 2018 agreement called "Jedi Blue" to keep those ad dollars flowing.

Now the European Commission has chimed in, expressing concern "that the agreement may form part of efforts to exclude ad tech services competing with Google's Open Bidding programme, and therefore restrict or distort competition in markets for online display advertising, to the detriment of publishers, and ultimately consumers."

Executive Vice-President Margrethe Vestager (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."

In the UK, Competition and Markets Authority (CMA) chief executive Andrea Coscelli said today: "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 startups and smaller businesses to break into the market – and may ultimately reduce customer choice."

The European Commission announced it would be carrying out an in-depth investigation as "a matter of priority."

The UK's CMA is similarly scrutinizing the deal under the 1998 Competition Act to decide if any laws were broken. It will also be taking a look at Google's conduct in general with regard to possible abuses of a dominant position.

The Register contacted both Google and Meta regarding the investigations.

A Meta spokesperson told us: "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." ®

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