Google and Facebook face inquiry over collusion claims

THE competition regulator has launched an investigation into claims that Facebook and Google secretly colluded to shore up a duopoly over digital advertising.

The Competition and Markets Authority (CMA) is investigating the two companies over a deal nicknamed “Jedi Blue”, which allegedly allowed Facebook to get preferential advertising rates in exchange for not challenging Google in a key market.

The British regulator announced the investigation alongside a separate European Commission investigation. Google is being sued by the US state of Texas over the alleged deal.

The CMA has stepped up investigations into tech companies including Google and Facebook parent Meta in recent months, amid growing concerns about the power of big tech.

The two companies control about 80pc of the £14bn digital advertising market, it said in 2020.

The regulator has the power to fine, or otherwise sanction, the companies if it rules that they have broken competition laws.

Jedi Blue, allegedly agreed in 2017 and 2018, is claimed to have involved Facebook receiving preferential rates and guaranteed space on

Google’s open bidding service, which places adverts on websites. In exchange, Facebook would allegedly support the Google system instead of supporting or developing a rival service known as header bidding.

Both companies have pre- viously denied wrongdoing.

“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.

“These business relationships enable Meta to deliver more value to advertisers and publishers, resulting in better outcomes for all.

“We will cooperate with both inquiries.”

Google said: “The allega- tions made about this agreement are false.

“The goal gramme is to work with a range of ad networks and exchanges to increase demand for publishers’ ad space, which helps those publishers earn more revenue. Facebook’s participation helps that. We’re happy to answer any questions the commission or the CMA have.”

Andrea Coscelli, CMA chief executive, said: “If one company has a stranglehold over a certain area, it can make it hard for start-ups … to break into the market.”