The European Commission and the UK have announced formal antitrust investigations into Google and Facebook and their online ad businesses. The investigations focus on the Masters of the Universe and their secret “Jedi Blue” deal to maintain their duopoly stranglehold on the online advertising business.
TechCrunch reports that the European Commission and the UK have launched formal antitrust investigations into Google and Facebook relating to the companies’ online ad businesses. The probes were announced by the EU’s competition division and the UK’s Competition and Markets Authority (CMA) earlier this week and focus on allegations of collusion between Google and Facebook.
The allegations relate to a September 2018 internal agreement between the two tech giants called “Jedi Blue” which has been accused of undermining competing ad systems in favor of Google’s Open bidding System.
Breitbart News previously reported that Facebook revealed in 2017 that it was testing a new way of selling ads online that could threaten Google’s control of the online advertising market, but just two years later Facebook announced that it would be joining an alliance of companies backing a similar effort by Google, seemingly abandoning its own plans that would have allowed the company to better compete with Google.
Facebook never clarified why it seemed to abandon its own project, but an antitrust lawsuit filed by Texas attorney general Ken Paxton in 2022 alleges that Google had extended to Facebook a sweetheart deal to be a partner.
The deal between Google and Facebook was reportedly code-named “Jedi Blue” and pertains to a segment of the online advertising market called programmatic advertising. A new advertising method called header bidding emerged as part of a workaround to reduce the reliance on Google’s ad platforms.
It has been claimed that Google and Facebook developed a quid pro quo agreement to rig the advertising market in their favor, with Google giving Facebook preferential rates and priority choice of ad placements in return for Facebook supporting its ad system and not developing competing technology.
The EU stated that it is concerned that the Jedi Blue agreement “may form part of efforts to exclude adtech 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.”
The EU’s EVP and competition chief, Margrethe Vestager recently commented on whether Facebook was an active participant in the scheme or whether Google acted alone, stating: “We have not concluded yet if it’s a Google thing alone or if they were in it together. It’s not a given that Meta was conscious of the effects of the deal and that’s what we have to investigate.”
“Many publishers rely on online display advertising to fund online content for consumers,” Vestager also said in a statement. “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 adtech market, to the detriment of rival ad serving technologies, publishers and ultimately consumers.”