EU Starts Probe into secret Facebook deal with Google

The European Union and the UK have announced the opening of competition proceedings against Google and Facebook for alleged illegal cooperation in the digital advertising market. The EU and UK competition authorities announced today that a formal investigation into the behavior of Google and Facebook has been launched over allegations that the two companies colluded to hinder competition in the online advertising market.

The background is the secret agreement, which is internally dubbed “Jedi Blue” and was signed in 2018. Details of the collusion between the two tech giants only surfaced last year when a lawsuit led to information about it being made public.

Favoritism towards Facebook?

As part of the Jedi Blue agreement, Google is said to have granted preferential terms to Facebook, reducing prices for buying ad space. The competition authorities now want to determine whether the two companies may have foreclosed competitors, ultimately hindering the development of the free market. Google had given Facebook (now known as Meta) the opportunity to participate in its so-called open-bid program with its own ad network that displays ads on third-party websites.

According to observers, because of the possible reduced prices when marketing its advertising orders through Google, Facebook could have prevented the advertising space from being commercialized through competing providers. If the investigation shows that Google and Facebook have indeed violated competition law with their agreements and secret contracts, the two companies threaten again with billions of euros in fines. Google again denied that it was an exclusive agreement and that it may have violated competition rules in Europe or Britain.