The EU and the UK both opened antitrust probes last weekend into a 2018 deal between tech giants Google (owned by Alphabet Inc) and Facebook owner Meta, allegedly aimed at cementing their dominance over the online ads market.
The European Commission said it was investigating the so-called “Jedi Blue” agreement that has also faced lawsuits in the United States as global regulators up their campaign to seriously limit the power of the so-called ‘Big Tech’ juggernauts. The EU said its probe would explore whether the arrangement between the internet behemoths had been used to “restrict and distort competition in the already concentrated ad tech market”.
The bloc’s competition supremo, Margrethe Vestager, said that if confirmed, the arrangement will have served to distort competition, squeezing rival ad tech companies, publishers “and ultimately consumers.”
At the same time, the UK’s Competition Market Authority also launched its own investigation into the agreement and the two watchdogs will “closely cooperate” on the investigation, the EU said. Chief Executive Andrea Coscelli said the CMA “will not shy away from scrutinizing the behavior of big tech firms… working closely with global regulators to get the best outcomes possible.”
The two online advertising giants are under intense pressure from publishers and online ad rivals as together, they overwhelm the online advertising market in pretty much the entire digital world.
In a statement, Google said the “allegations made about this agreement are false” and that its deal with Meta “is a publicly documented, procompetitive agreement” that exists with other companies. Meta said it would cooperate with the inquiries but that the arrangements “deliver more value to advertisers and publishers, resulting in better outcomes for all”.
Giants face US scrutiny, too, over online ads
In the latest accusations, which also form the basis for lawsuits in the United States, the “Jedi Blue” deal served to oust competition by manipulating online ads auctions. These are the ultra-sophisticated system that determines which ads appear on web pages based on the anonymized profiles of internet users.
US court documents revealed that the top bosses of Google and Facebook were directly involved in approving the allegedly illegal 2018 deal. The legal documents filed in a New York court clearly refer to Sundar Pichai, chief of Google’s parent firm Alphabet, as well as Facebook executive Sheryl Sandberg and CEO Mark Zuckerberg — even if their names were redacted.
Google has further enraged publishers and online ad rivals with its plan to overhaul its ad tracking system on its world-leading Chrome browser and Android smartphone operating system. The internet giant made the move — which does away with personal online trackers that are known as “cookies” — to answer increasing pressure to better guarantee privacy for web users.
Critics see it as a way for Google to deny publishers and advertisers precious data and embolden the company’s dominance in advertising. Alphabet pulled in over US$60 billion in the fourth quarter of 2021 just in ad revenue, which makes up over 80% of its income. Meta booked US$33.6 billion in sales in the same period, mostly from advertising.
© Agence France-Presse
2 December 2022
1 December 2022