BRUSSELS/LONDON (Times Of Ocean)- Parallel investigations have been launched by the European Union and the British government into a 2018 online display advertising deal between Google and Facebook, adding to the long list of regulatory challenges facing the U.S. tech giants.
Both Alphabet’s (GOOGL.O) Google unit and Facebook, whose parent company is now called Meta (FB.O), defended the “Jedi Blue” deal, which the EU argues may stymie ad tech rivals and disadvantage publishers in online display advertising.
Publishers, such as news providers, can offer their ad space to multiple ad exchanges and networks simultaneously, potentially increasing ad revenue.
Through the Jedi Blue agreement, Meta will be able to participate in Google’s Open Bidding program, which is a rival to header bidding.
According to EU antitrust chief Margrethe Vestager, Google’s Open Bidding may have been targeted to weaken it and eliminate it from the market for displaying ads on publisher websites and apps.
One aspect of the EU investigation focuses on the deal, whereas a second angle examines whether Google has abused its dominant position, which could mean that Facebook is off the hook if this is the case.
“This is a publicly documented, pro-competitive agreement that enables Facebook Audience Network (FAN) to participate in our Open Bidding program, along with dozens of other companies,” Google said in response to the investigations.
“Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements,” Meta said in a statement.
In the past decade, Google, which has already been hit with more than 8 billion euros in EU antitrust fines, and Facebook are both being investigated by the bloc’s executive over other issues, and could face fines of up to 10% of their global turnover for violating its rules.
The British antitrust authority is also investigating the deal, and the EU competition watchdog said it wants to work closely with its British counterpart.
A lawsuit filed by Texas and 15 other U.S. states against Google alleged that the deal with Facebook was struck to counter header bidding, which publishers wanted to use to make more money from advertising on their websites.