EU and U.K. antitrust authorities launched parallel probes into an agreement between Google and Facebook owner Meta for online display advertising services.
The European Commission and the U.K.’s Competition and Markets Authority are concerned that the companies hindered competition in the markets for online display advertising services and pledged to cooperate “closely” as they carry out their investigations.
The watchdogs are looking into a 2018 deal, under which the companies agreed that Meta’s Audience Network would participate in Google’s Open Bidding program. The Commission is concerned that the deal could be part of efforts to exclude other ad tech services competing with Google.
The agreement between the two internet giants was already getting tough scrutiny in the U.S., where it is part of a federal antitrust suit against Google by Texas, 14 other U.S. states and Puerto Rico. In the latest version of their suit, they said that the chief executives of both companies approved the agreement to carve up part of the online advertising market.
The new probes ramp up scrutiny into Google’s ad tech business, which is already the subject of an investigation in Brussels and has raised the concerns of the Australian Competition and Consumer Commission, which in September said that Google has a “dominant position in the ad tech supply chain” that could harm advertisers and publishers.
Competition authorities around the world have stepped up efforts to take on big tech companies, including their power in the advertising market.
Both Google and Meta have locked horns with the European watchdogs over a range of issues. For the social media giant, these include probes in London and Brussels into how it uses data from advertisers to compete with them. Meta also is fighting in court the U.K. competition authority’s order to divest GIF library Giphy. Google has been fined more than €8 billion in different EU antitrust cases.
“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,” EU competition chief Margrethe Vestager said in a statement.
“If confirmed by our investigation, this would restrict and distort competition in the already concentrated ad tech market, to the detriment of rival ad serving technologies, publishers and ultimately consumers,” she said.
The British regulator, which also has investigations into Apple’s App Store and Apple and Google’s mobile ecosystems, said the latest probe is part of a wider investigation into Google’s practices in online advertising auctions.
The CMA is looking into Google’s conduct when it comes to header bidding services, which allow news publishers and other sellers to offer their online advertising space to multiple buyers at the same time. This makes auctions more competitive, as buyers compete with each other.
“We’re concerned that Google may have teamed up with Meta to put obstacles in the way of competitors who provide important online display advertising services to publishers,” CMA Chief Executive Andrea Coscelli said.
“We will not shy away from scrutinizing the behavior of big tech firms while we await powers for the Digital Markets Unit,” Coscelli said. “If one company has a stranglehold over a certain area, it can make it hard for start-ups and smaller businesses to break into the market — and may ultimately reduce customer choice.”
The companies said the agreement is actually pro-competitive and pledged to cooperate with the investigations.
“The allegations made about this agreement are false,” a Google spokesperson said, adding that dozens of companies participate in the Open Bidding program and that Meta doesn’t get any advantages that help them win auctions.
The European Commission is investigating potential breaches of competition rules on anti-competitive agreements between companies and abuse of a dominant position. Should it find that the conduct constitutes only abuse of a dominant position by Google, Meta would not be charged.
A Meta spokesperson said that its “non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements.”
The Commission said that it will now conduct its in-depth probe “as a matter of priority.”
This article has been updated.
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