Brussels suspects the Google and Meta groups (ex-Facebook) of having entered into an agreement around online display advertising which would have violated EU anti-competitive rules.
The European Commission announced on Friday morning that it had opened an antitrust investigation against Google and Meta, because it fears that the two companies have sealed an antitrust agreement around online display advertising services. The agreement in Brussels’ sights would have resulted in violating Article 101 of the Treaty on the Functioning of the European Union (TFEU) on competition rules within the EU. Our explanations.
The “Jedi Blue” agreement in the sights of the European Commission
The Vice-President of the European Commission, Margrethe Vestager, on the front line on these questions of potential anti-competitive behavior, explains that “ many publishers rely on online display advertising to fund consumer-facing online content “. A service of which Google is the king, because of its position with consumers.
What poses a problem here for Vestager and the Commission is the agreement concluded in September 2018 between Google and Meta, dubbed “Jedi Blue”, which has already been singled out by many prosecutors in the United States, the accusing of wanting kill the competition in the online advertising market “, on the sector of what is called the ” header bidding “. It is a method that allows the publisher to organize a competition between the different advertising networks when selling its inventory, and therefore to maximize its income », Explains the CNIL to us, a technique which, moreover, can add latency to the loading of web pages.
“Allegations made about this deal are false. This is a pro-competitive, publicly documented agreement that allows Facebook Audience Network (FAN) to participate in our “Open Bidding” program, along with dozens of other companies. FAN’s participation is non-exclusive and they do not receive any benefits that would help them win auctions”.
Official reaction from Google, collected by Clubic
This Jedi Blue deal may have, according to the European Commission, targeted a competing technology to Google’s real-time header auction platform, ” for the purpose of weakening it and excluding it from the market for displaying advertisements on publishers’ sites and applications “.
A deal that would distort and restrict competition in the already concentrated online advertising market
Brussels explains that if its investigation were to confirm this, this Google/Meta agreement would then restrict and distort competition in an already highly concentrated advertising technology market, to the detriment of competing advertising delivery technologies, but also of publishers and, ” ultimately consumers adds Margrethe Vestager.
“The goal of this program is to work with a range of ad networks to increase demand for publishers to purchase ad space, enabling those publishers to generate more revenue. Facebook’s participation in this program contributes to this. We are ready to answer any questions from the Commission or the CMA (UK Competition Authority)”.
Official reaction from Google, collected by Clubic
Google provides ad services and acts as an intermediary between publishers and advertisers, through real-time auctions of online display advertising space, both on websites and on mobile applications, such as we explained it, in particular via its Open Bidding program. Meta, for its part, delivers display advertising services (display ads being all banners, squares and skins that can use audio, video or graphic elements), and participates, via its Meta Audience Network tool, in auctions for advertising space from third-party publishers, all using the advertising services of Google and its competitors.
“Meta’s non-exclusive auction agreement with Google and similar agreements we have with other auction platforms have helped increase competition for ad placements. These business relationships allow Meta to deliver more value to advertisers and publishers, resulting in better results for everyone. We will cooperate with both investigations.”
Official reaction of the Meta group, collected by Clubic
If the investigation does not predict a future conviction, the agreement between Google and Meta worries the authorities around the world. The British competition authority (the Competition and Markets Authority or CMA) has also launched its own investigations. She also intends to cooperate on this matter with Brussels.
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