The Competition and Markets Authority (CMA) is taking a closer look at Google and Meta’s conduct over concerns that they hampered competition in markets for online display advertising services.
This is to focus on whether the companies restricted or prevented the uptake of header bidding services and whether Google also affected the ability of other firms to compete with its products in this area, a press statement by the CMA noted.
Header bidding is a service which allows sellers, such as news publishers, to offer their online advertising space to multiple buyers at the same time, rather than receiving offers one by one.
As a result, buyers – or advertisers – compete against each other for ad space and publishers can compare bids from multiple buyers simultaneously. This competition between buyers can make auctions more competitive.
“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. If one company has a stranglehold over a certain area, it can make it hard for start-ups and small businesses to break into the market, and may ultimately reduce customer choice,” Andrea Coscelli, CMA Chief Executive Officer, said.
As part of its investigation, the CMA will consider whether an agreement between Google and Meta (previously Facebook) which Google internally codenamed ‘Jedi Blue’ broke the law.
The CMA is also scrutinising 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 European Commission (EC) has launched its own probe into the agreement between Google and Meta and the agreement is also the subject of a complaint by the State of Texas (and other US States) currently in the US courts. The CMA will seek to work closely with the EC as the independent investigations develop.
“We will not shy away from scrutinising the behaviour of big tech firms while we await powers for the Digital Markets Unit, working closely with global regulators to get the best outcomes possible,” Coscelli said.
As this is only the start of the CMA’s investigation, no decision has been made on whether Google or Meta have broken the law.
This case follows on from the CMA’s market study into online platforms and digital advertising, which considered Google’s position in relation to header bidding services and the wider ‘ad tech stack’, of which heading bidding services is a part. The CMA has also received complaints in relation to Google’s conduct in this area.
The government has recently proposed powers for the Digital Markets Unit which will sit within the CMA. This unit will ultimately be responsible for deciding which ‘big tech’ firms face legally enforceable codes of conduct to govern their behaviour.
“Many publishers rely on online display advertising to fund online content for consumers. 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 ad tech market, to the detriment of rival ad serving technologies, publishers and ultimately consumers,” Margrethe Vestager, executive Vice-President in charge of competition policy, said,
In the meantime, the CMA is pressing ahead with its probes into Apple’s App Store, Meta’s use of data and Apple and Google’s mobile ecosystems over competition concerns.
It recently accepted commitments from Google relating to its proposed removal of third-party cookies from the Chrome browser. The CMA has adopted a joined-up approach across all related cases to ensure the best outcomes for customers and other businesses.