EU and UK launch antitrust investigation into Google and Meta’s adtech dealings

Illustration by Alex Castro / The Verge

The EU and UK are investigating a deal between the two firms that critics say allowed them to block smaller tech companies from gaining a foothold in the online ad market.

The European Commission said in a statement that it was concerned that the September 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.

The UK's Competition Market Authority said it was also investigating the deal and that it was concerned that the deal may have put obstacles in the way of competitors.

The Jedi Blue deal is being investigated by 15 state attorneys general in the US. There are multiple legal fronts that have led to a slow trickle of details about the deal. According to court filings, Jedi Blue was reviewed and approved by top executives at both Meta and Google.

The origin of Jedi Blue can be traced back to a decision by Meta to support an adtech system that would compete with Google. Meta dropped its support of the technology after it was offered preferential access to its bidding system for online ads, according to lawsuits in the US. As part of the deal, Meta got to be first in the queue when buying ad real estate from Google, and then stopped investing in rival adtech systems.

According to US prosecutors, the two companies worked together to save each other money and block out rivals.

The European Commission says it's possible that only Google is to blame for the investigations. Margrethe Vestager, the EU's competition chief, told The Financial Times that they have not concluded yet if it is a Google thing alone or if they were in it together. It isn't a given that Meta was aware of the effects of the deal.

The EU and UK investigations were misguided according to Meta and Google.

The allegations made about this agreement are false. This is a publicly documented, procompetitive agreement that allows Facebook Audience Network to participate in our Open Bidding program along with dozens of other companies.

Meta subsidiary Facebook said in a statement that the non-exclusive bidding agreement with Google and similar agreements it has with other bidding platforms have helped to increase competition for ad placements.

If Meta or Google are found to be in violation of EU competition law, they could be fined up to 10 percent of their global annual revenue. The investigation is likely to take years to reach a conclusion, and will give both firms plenty of opportunities to appeal any rulings.