The ignorance of competition law is probably at the highest level on Facebook and Google. The bosses of both companies signed a contract some time ago, in which there can hardly be any doubt as to its illegality. The agreement dates back to 2018 and is intended to grant Facebook, one of the largest advertising companies on the Internet, special rights on Google’s advertising platform, which is also dominant.
Underneath the document are the signatures of Mark Zuckerberg and Sundar Pichai, the top bosses of both companies. The contract has now been made public in the wake of court filings and by US Magazine BuzzFeed evaluated. The matter concerns the allocation of advertising space by Google. Basically, the advertising placements are awarded by auction – whoever bids the most gets the most attractive positions and target groups. With this process, Google became the leading marketer of online advertising.
However, Facebook is also a heavyweight in the industry and was working on a system called “Header Bidding” that worked in a similar way and could have become a real threat to Google’s market dominance.
Benefits for Facebook
The management of the search engine group therefore entered into negotiations with the competitor. At the end of this was the contract, which is referred to as “Jedi Blue”. This will give Facebook more information, faster access to the auctions and other benefits. Facebook then postponed its own project and Google was able to maintain its position. The contract is now evidence in a competition lawsuit that several US states are bringing against Google.
It is about a possible abuse of the dominant position in the advertising market with a special focus on the auction system. The Jedi Blue contract would be pretty clear evidence that Google does not treat all bidders equally, as is repeatedly claimed.
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