UK, EC Investigate Google / Facebook ‘Jedi Blue’ Agreement

The U.K. Competition and Markets Authority (CMA) and the European Commission have launched investigations into whether Alphabet/Google and Meta/Facebook illegally conspired to hold their dominant positions in the online display advertising market.

CMA wants to know whether the companies restricted or prevented the uptake of header bidding services and whether Google also affected the ability of other firms to compete. These bidding services allow news publishers and other sellers to offer their online advertising space to multiple buyers at the same time, rather than receiving offers one by one. Advertisers compete for ad space and publishers can compare bids from multiple buyers simultaneously.

But the CMA is looking into whether Google and Meta broke the law by entering into a secret deal, codenamed “Jedi Blue,” in September 2018. The agreement allegedly gave Meta (then Facebook) an advantage in Google’s ad auctions if Facebook dropped its own ad services. The CMA is also scrutinizing Google’s conduct in relation to header bidding services more widely to see if the firm abused a dominant position and gained an unfair advantage over competitors trying to provide a similar service. The companies argue that Jedi Blue was not an illegally exclusive arrangement. The existence of the agreement first surfaced in litigation brought against the companies in federal court in Texas by a group of state attorneys general.

The European Commission launched a parallel investigation and is cooperating with CMA in its probe. “The Commission is concerned that the agreement may form part of efforts to exclude ad tech services competing with Google’s Open Bidding program, and therefore restrict or distort competition in markets for online display advertising, to the detriment of publishers, and ultimately consumers,” the EC said in a statement.

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