Facebook and Alphabet unit Google on Friday defended their online advertising deal after EU and UK antitrust authorities launched investigations into the agreement that Google codenamed Jedi Blue.

Figure 1: EU and UK open antitrust probes into Google and Meta over 2018 ad deal

Facebook and Alphabet unit Google on Friday defended their online advertising deal after EU and UK antitrust authorities launched investigations into the agreement that Google codenamed Jedi Blue.

"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," Google said in a statement.

"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," Facebook, whose parent company has been renamed Meta, said in a statement.[1]

Regulators in the EU and U.K. have opened antitrust probes into Google and Meta, formerly Facebook, over the tech giants’ 2018 ad deal.

The parallel probes, announced Friday, will look at whether the so-called “Jedi Blue” agreement between the two companies hampered competition in markets for online display advertising services. Online display ads are graphic ads that appear on websites, mobile apps and social media.

According to a group of U.S. state attorneys generals in January, the Jedi Blue deal allowed Google and Meta to rig auctions for online ads and illegally fix prices, with smaller companies suffering as a result. Both companies rejected the claims at the time.

Andrea Coscelli, CEO of the U.K.’s Competition and Markets Authority, said in a statement Friday: “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.” [2]

“If one company has as 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.

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.” [3]

References:

1. https://www.moneycontrol.com/news/business/facebook-google-defend-advertising-deal-investigated-by-eu-uk-watchdogs-8221411.html
2. https://www.cnbc.com/2022/03/11/google-meta-face-antitrust-probes-from-regulators-in-europe-and-uk.html
3. https://www.markettradingessentials.com/2022/03/eu-and-uk-open-antitrust-probes-into-google-and-meta-over-2018-ad-deal/

Cite this article:

Sri Vasagi K (2022), Google and Meta over 2018 ad deal, Anatechmaz, pp. 116