The European Commission has launched an investigation into agreements between online advertising powerhouses Google and Meta. The United Kingdom has also opened an investigation. The cases join a long line of investigations into abuses of power at the world’s largest tech companies.
The deal under scrutiny is dubbed “Jedi Blue.” An investigation into this has been underway in America since the end of 2020. Meta – the parent company of Facebook and Instagram – and Google are accused of collaborating to make their businesses bigger and split advertising profits. In this way competition in their market can be eliminated.
In a response, Meta says that such deals actually create more competition; as always, it promises to cooperate with the investigations. Google was not immediately available for comment.
Disadvantageous for the consumer
“Many publishers depend on online advertisements to fund their content,” said Margrethe Vestager, European Commission’s Commissioner for Competition. “If our suspicion is confirmed, it means that the deal between Meta and Google distorts competition between them and that is disadvantageous for all parties and ultimately the consumer.”
Opening a formal investigation is the first step in a legal process that can take years. If the parties are ultimately proven to have broken the rules, this could cost them up to 10 percent of their worldwide turnover. That amounts to billions of euros.
It is not the first time that major tech companies have been investigated simultaneously by the UK and the EU. This also happened with Meta last June. In that case, it is examined whether the company is abusing its dominant market position through its sales service Marketplace.