Google And Meta Suspected Of Conspired To Cripple Competitors Through Their Advertising Business

JAKARTA - Google and Meta are again facing an antitrust investigation into their online display ad business, dubbed Jedi Blue. The investigation was carried out by the European and British commissions.

In this case, the European Union (EU) competition division as well as the UK Competition and Markets Authority (CMA) suspect Google and Meta in the September 2018 internal agreement or Jedi Blue.

Jedi Blue is accused of tampering with a competing ad system (header bidding) that underpins Google's Open Bidding system. The search engine giant and Facebook's parent company Meta have been accused of working together to carve out advertising profits, acting together to prop up their businesses.

“Advertising is very important and as such, it is important that there is competition over who can place ads where,” said EU Competition Head, Margrethe Vestager.

He said the EU and Britain had agreed to open an investigation into the matter on the same day.

“There are other people besides Google who do it. What we suspect here is that there may be an agreement between Google, and then Facebook, only to use Google services and not competing services. That's a big problem," said Vestanger.

Launching TechCrunch, Saturday, March 12, details of Jedi Blue previously emerged through an antitrust lawsuit led by the state of Texas, United States (US) against Google's advertising business.

The lawsuit alleges Google and Facebook made a quid pro quo agreement to rigged the market in their favor. Google is also accused of giving Facebook preferential rates and priority.

Where the social network gets a choice of primary ad placement in return for supporting its ad system and not building competing ad technologies or using rival publisher systems.

With this investigation, companies found violating EU laws will lose up to 10 percent of global revenue, but the legal process could take years.

Meanwhile, the British commission said the investigation would consider whether the agreement between Google and Meta violated the law. They will also research Google's behavior with respect to offering a broader service header to see if the company is abusing its dominant position, and gaining an unfair advantage over competitors who try to provide similar services.

"We are 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," said CMA CEO Andrea Coscelli.

“If one company has a stranglehold over a certain area, it can make it harder for startups and small businesses to enter the market, and can ultimately reduce customer choice.”

In response to this, Google denied the accusations, calling them false.

"The goal of this program is to work with various ad networks and exchanges to increase the demand for publisher ad space, which helps those publishers earn more revenue," explains Google.

Likewise with Meta which says, "non-exclusive bidding agreements with Google and similar agreements we have with other bidding platforms, have helped increase competition for ad placements," said Meta.

Under Vestager, the EU has accelerated its Big Tech competition investigation with a series of enforcement decisions against Google, under its control such as Google Shopping, Android and AdSense.

CMA has also been preparing to tackle the technology ahead of expected competition reforms. Dan has recently been closely involved with Google over its investigation of its Privacy Sandbox proposal.