Jedi Blue

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Jedi Blue is an agreement between Alphabet and Meta Platforms that allegedly gave Facebook an illegal advantage in Google's ad auctions in exchange for Facebook's word that it would end its own ad service plans.

Contents

History

In 2007 Google purchased DoubleClick and its DoubleClickForPublishers advertising system. [1] Header bidding emerged in 2017 as a new way for purchasers to buy ad space. It allowed advertisers to participate in auctions across multiple ad platforms (such as Google's). Facebook announced plans to become header bidding-compatible. This would allow Facebook advertisers to bypass Google's platform, adding to Facebook's revenues and subtracting from Google's. [2] In 2018, Facebook and Google came to an agreement, leading Facebook to retreat from header bidding that became a focus in the suit. [1]

Multiple U.S. states sued Google in 2020. Details about the agreement were obtained in the course of the lawsuit. [2] In September 2022, a ruling in the case dismissed claims there was collusion between Google and Facebook regarding the matters covered in the agreement. [3]

On March 11, 2022, antitrust regulators opened an investigation into the agreement in the European Union and the United Kingdom, with claims that it undermined competition in the advertising market. [4]

Agreement

According to the draft lawsuit, Facebook agreed to reduce its participation in header bidding in return for "information, speed, and other advantages" that would come from staying with Google. Facebook allegedly would receive a guarantee of 90% of auctions regardless of the bids; 300 ms to bid (vs 160 offered to others), along with the ability to identify 80% of smartphone users and 60% of web users. [2] [1]

Defendant responses

Google

Google spokesperson Peter Schottenfels said, "Despite Attorney General Paxton's three attempts to re-write his complaint, it is still full of inaccuracies and lacks legal merit ... There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers." [2]

Facebook

Meta spokesperson Christopher Sgro said, "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 ... These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all." [2]

Related Research Articles

Google AdSense is a program run by Google through which website publishers in the Google Network of content sites serve text, images, video, or interactive media advertisements that are targeted to the site content and audience. These advertisements are administered, sorted, and maintained by Google. They can generate revenue on either a per-click or per-impression basis. Google beta-tested a cost-per-action service, but discontinued it in October 2008 in favor of a DoubleClick offering. In Q1 2014, Google earned US$3.4 billion, or 22% of total revenue, through Google AdSense. AdSense is a participant in the AdChoices program, so AdSense ads typically include the triangle-shaped AdChoices icon. This program also operates on HTTP cookies. In 2021, over 38.3 million websites use AdSense.

DoubleClick Inc. was an American advertisement company that developed and provided Internet ad serving services from 1995 until its acquisition by Google in March 2008. DoubleClick offered technology products and services that were sold primarily to advertising agencies and mass media, serving businesses like Microsoft, General Motors, Coca-Cola, Motorola, L'Oréal, Palm, Inc., Apple Inc., Visa Inc., Nike, Inc., and Carlsberg Group. The company's main product line was known as DART, which was intended to increase the purchasing efficiency of advertisers and minimize unsold inventory for publishers.

<span class="mw-page-title-main">Google Ads</span> Online advertising platform owned by Google

Google Ads is an online advertising platform developed by Google, where advertisers bid to display brief advertisements, service offerings, product listings, and videos to web users. It can place ads in the results of search engines like Google Search, mobile apps, videos, and on non-search websites. Services are offered under a pay-per-click (PPC) pricing model.

Click fraud is a type of fraud that occurs on the Internet in pay per click (PPC) online advertising. In this type of advertising, the owners of websites that post the ads are paid based on how many site visitors click on the ads. Fraud occurs when a person, automated script, computer program or an auto clicker imitates a legitimate user of a web browser, clicking on such an ad without having an actual interest in the target of the ad's link in order to increase revenue. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.

Yahoo! Native is a native "Pay per click" Internet advertising service provided by Yahoo.

Pay-per-click (PPC) is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher when the ad is clicked.

Cost per action (CPA), also sometimes misconstrued in marketing environments as cost per acquisition, is an online advertising measurement and pricing model referring to a specified action, for example, a sale, click, or form submit.

Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising that uses the Internet to promote products and services to audiences and platform users. Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising, and mobile advertising. Advertisements are increasingly being delivered via automated software systems operating across multiple websites, media services and platforms, known as programmatic advertising.

<span class="mw-page-title-main">Tacit collusion</span> Collusion between competitors

Tacit collusion is a collusion between competitors who do not explicitly exchange information but achieve an agreement about coordination of conduct. There are two types of tacit collusion: concerted action and conscious parallelism. In a concerted action also known as concerted activity, competitors exchange some information without reaching any explicit agreement, while conscious parallelism implies no communication. In both types of tacit collusion, competitors agree to play a certain strategy without explicitly saying so. It is also referred to as oligopolistic price coordination or tacit parallelism.

Google Ad Manager is an ad exchange platform introduced by Google on June 27, 2018. It combines the features of two former services from Google's DoubleClick subsidiary, DoubleClick for Publishers and DoubleClick Ad Exchange (AdX). Google Ad Manager initially used a second-price auction format, before announcing that it would be replaced with a first-price auction format in March 2019. Google Ad Manager is the free version of this online ad management software and it is recommended for small businesses. Google Ad Manager 360 is the paid version. Google Ad Manager does not require a minimum amount of impressions on individual active ads, but it does have a limit of 200 million impressions per month. Google Ad Manager manages inventory for advertisers, publishers and ad servers. Advertisers are able to manage their inventory of ad creative, publishers are able to manage their ad space inventory, and ad servers can use the platform to determine which ad to serve and where to serve it. Additionally, Google Ad Manager can use data collected from ad performance and ad space performance to make suggested optimizations to the user. These optimizations suggest what the user could change to better reach the goals they have set for a particular campaign.

A demand-side platform (DSP) is a concept that combines various software solutions for advertisers to automate the process of buying and selling ad impressions in real time.

Real-time bidding (RTB) is a means by which advertising inventory is bought and sold on a per-impression basis, via instantaneous programmatic auction, similar to financial markets. With real-time bidding, advertising buyers bid on an impression and, if the bid is won, the buyer's ad is instantly displayed on the publisher's site. Real-time bidding lets advertisers manage and optimize ads from multiple ad-networks, allowing them to create and launch advertising campaigns, prioritize networks, and allocate percentages of unsold inventory, known as backfill.

Search syndication is a type of contextual advertising which allows online search advertisers to buy keyword-targeted traffic outside of search engine results pages. This is considered to be an alternative to advertising on search engines, since 43% of all searches occur outside of the top search engines.

<span class="mw-page-title-main">Meta Platforms</span> American multinational technology conglomerate

Meta Platforms, Inc., doing business as Meta, and formerly named Facebook, Inc., and TheFacebook, Inc., is an American multinational technology conglomerate based in Menlo Park, California. The company owns and operates Facebook, Instagram, Threads, and WhatsApp, among other products and services. Meta ranks among the largest American information technology companies, alongside other Big Five corporations Alphabet (Google), Amazon, Apple, and Microsoft. The company was ranked #31 on the Forbes Global 2000 ranking in 2023.

<i>Federal Trade Commission v. Meta Platforms, Inc.</i> United States ongoing antitrust court case

Federal Trade Commission v. Meta Platforms, Inc. is an ongoing antitrust court case brought by the Federal Trade Commission (FTC) against Facebook parent company Meta Platforms. The lawsuit alleges that Meta has accumulated monopoly power via anti-competitive mergers, with the suit centering on the acquisitions of Instagram and WhatsApp.

<span class="mw-page-title-main">Digital Markets Act</span> European Union regulation on digital platforms

Digital Markets Act Regulation 2022 (EU) 2022/1925 ("DMA"), is an EU regulation that aims to make the digital economy fairer and more contestable. The regulation entered into force on 1 November 2022 and became applicable, for the most part, on 2 May 2023.

Federated Learning of Cohorts (FLoC) is a type of web tracking. It groups people into "cohorts" based on their browsing history for the purpose of interest-based advertising. FLoC was being developed as a part of Google's Privacy Sandbox initiative, which includes several other advertising-related technologies with bird-themed names. Despite "federated learning" in the name, FLoC does not utilize any federated learning.

<i>United States v. Google LLC</i> (2020) Antitrust case alleging Google illegally dominates internet search

United States v. Google LLC is an ongoing federal antitrust case brought by the United States Department of Justice (DOJ) against Google LLC on October 20, 2020. The suit alleges that Google has violated the Sherman Antitrust Act of 1890 by illegally monopolizing the search engine and search advertising markets, most notably on Android devices.

<i>United States v. Google LLC</i> (2023) Antitrust case alleging Google illegally dominates digital advertising

United States v. Google LLC is an ongoing federal antitrust case brought by the United States Department of Justice (DOJ) against Google LLC on January 24, 2023. The suit accuses Google of illegally monopolizing the advertising technology (adtech) market in violation of sections 1 and 2 of the Sherman Antitrust Act of 1890. The suit is separate from an ongoing DOJ antitrust case launched in 2020 accusing Google of illegally monopolizing the search engine market.

References

  1. 1 2 3 Dans, Enrique (January 19, 2022). "Jedi Blue: A Scandal That Highlights, Yet Again, The Need To Regulate Big Tech". Forbes. Retrieved 2022-01-17.
  2. 1 2 3 4 5 Wodinsky, Shoshana (January 14, 2022). "Google's Pichai, Meta's Zuckerberg Backed Alleged Ad Price-Fixing Scheme, Unsealed Court Docs Claim". Gizmodo. Retrieved 2022-01-17.
  3. Robertson, Adi (13 September 2022). "Judge throws out Facebook collusion claims in Google antitrust suit". The Verge.
  4. Satariano, Adam (11 March 2022). "A secret ad deal between Google and Meta is under scrutiny in Europe". The New York Times. Retrieved 14 March 2022.