CMA investigates Google and Meta over ad tech concerns
The 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.
Image credit: CMA
- CMA and European Commission launch parallel probes into Google and Meta’s “Jedi Blue” agreement.
- CMA Chief Executive says: “We will not shy away from scrutinising the behaviour of big tech firms while we await powers for the Digital Markets Unit.”
The Competition and Markets Authority (CMA) is focusing 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.
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.
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.
Andrea Coscelli, CMA Chief Executive, said:
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 smaller businesses to break into the market – and may ultimately reduce customer choice.
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.
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.
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.
Find out more about this investigation on the case page.
Notes to Editors
-
The competition legislation relevant to the CMA’s investigation is the Competition Act 1998. This case concerns both the Chapter I prohibition (which makes agreements illegal where they have the object or effect of restricting competition) and the Chapter II prohibition (which makes it illegal for a company that holds a dominant position from behaving to the detriment of competition): a) For Chapter I, the case includes both Google and Meta (previously Facebook), and the agreement between them; b) For Chapter II, the case concerns only Google’s behaviour, including the agreement it entered into with Meta.
-
The CMA may launch an investigation under the Competition Act 1998 if it has reasonable grounds to suspect that there has been an infringement of competition law. If the CMA decides that Google or Meta breached competition law, it can impose a fine up to 10% of the company’s worldwide turnover, as well as issue legally binding directions to bring the breach to an end.
-
“Google” refers to Google UK Limited, Google LLC and Alphabet Inc and “Meta” refers to Facebook UK Limited, Meta Platforms Ireland Limited and Meta Platforms, Inc.
-
Ad tech is used in the sale of online advertising. A series of tools have been developed and sold to help intermediate the sale of online advertising between sellers (publishers, like newspapers and news websites) and buyers (advertisers). Header bidding is a service within the ad tech stack which emerged from around 2015 and was widely adopted. Google has a strong position at each part of the ad tech stack. More information can be found in the CMA’s final report for its market study into online platforms and digital advertising.