UK closes 'Jedi Blue' antitrust collusion case against Google and Meta
The U.K.'s Competition and Markets Authority (CMA) won't be pursuing an anticompetition collusion case against Google and Facebook's parent Meta, following a similar decision made by its counterparts in the Europe Union.
However, Google will remain under the CMA's spotlight, with parts of the Google-Meta case now being bundled with a separate ongoing antitrust against Google.
The case in question relates to online display advertising, focusing on an alleged agreement between Google and Facebook dating back to 2018, dubbed "Jedi Blue." The deal reportedly meant that Google would give Facebook preferential treatment in terms of ad rates, placements and access to data, in exchange for Facebook distancing itself from an alternative programmatic advertising system called header bidding, which would have cut into Google's coffers.
Both companies denied any wrongdoing, saying that there was no exclusivity agreed between them.
However, authorities in the EU and the U.K. announced parallel investigations exactly a year ago today, though the European Commission quietly closed its part of the investigation into the deal back in December, giving little in the way of any reason for its decision. That same day though, the Commission initiated a separate investigation into Meta over the way it ties together its social network and Marketplace classified ads service, alleging that the company was abusing its dominant market position.
Now, the U.K.'s CMA has revealed that it is closing its case against the duo on "administrative priority grounds." Administrative priorities constitute a fairly broad gamut of conditions under which the CMA deems either there isn't enough evidence to determine a law breach, or that it can't justify "continued allocation of resources" if the case "no longer fits within the CMA’s casework priorities."
In terms of determining its rationale for closing its investigation, TechCrunch has reached out to the CMA for more information but we had yet to hear back at the time of writing. However, its published guidance indicates that it might not be willing to divulge the full reasons for such decisions. It says:
The amount of detail given will vary according to the circumstances of each case. In more advanced investigations, the CMA is likely to give more details than in the case of complaints which have not been the subject of extensive investigation.
It's not difficult to see why the U.K. has decided to retreat here. Its peers in Europe have already pulled the plug on the case to pursue other anticompetitive channels against Big Tech, including Meta and Google. Separately, a U.S. judge ruled back in September that the Jedi Blue deal wasn't anticompetitive.
So with dwindling support for litigation around Jedi Blue, the U.K. would have effectively been fighting the case alone. But on top of that, the CMA also has a separate ongoing antitrust case running against Google over its dominant conduct in the ad tech ecosystem -- and it acknowledged that this has a part to play in today's decision. The CMA said that it will combine parts of the now-closed header bidding investigation into its other ad tech antitrust case against Google.
What this means is that Meta is off the hook with regards to Jedi Blue, as is Google. However, Google remains in the CMA's crosshairs in terms of whether any agreements it has with Meta enables it to abuse its dominant position in the ad tech market. The CMA notes:
The CMA is continuing to investigate whether Google has abused a dominant position through its conduct in relation to header bidding services under Chapter II of the Competition Act 1998. That investigation includes whether Google has abused a dominant position through its agreement with Meta.
The long and the short of all this is that with so many tangential antitrust cases going against Big Tech in Europe, it simply makes sense to combine cases where possible to reduce the administrative burden. And in this instance, Meta stands to benefit.
A Meta spokesperson said that they "welcome this decision," reiterating the company's existing stance around how it engages in bidding agreements. "Meta’s non-exclusive bidding agreements continue to increase competition for ad placements, and enable us to deliver more value to advertisers and publishers," the spokesperson said in a statement to TechCrunch.
A Google spokesperson said that they are "pleased" that the CMA has closed its investigation into its open bidding agreement with Meta.
"This is the same conclusion as reached by the European Commission and a U.S. court that previously dismissed claims about the agreement," the spokesperson said. "The open bidding program works with a range of ad networks and exchanges to increase demand for publishers’ ad space, which helps them earn more revenue. Meta’s participation has always been public, was never exclusive, and comes without any auction advantages."