Google, Meta and Jedi Blue: Feeling the force of parallel EU and UK investigations

Mondial | Vidéo | avril 2022 | 5:52

Caroline Thomas	Hello Richard, lovely to see you again, and thank you for joining me today. Richard, you and everybody I’m sure watching will be familiar with the focus on digital markets by the competition authorities over recent years, and in particular a number of cases that have been brought against the largest platform companies. There was a new development on this front a few weeks ago. On 11 March, the European Commission and the CMA announced a new case involving the intriguingly named “Jedi Blue agreement”. I wondered if we could start, maybe you could explain a little bit about what this case is about as far as we know.
Richard Whish QC	Yes, well ok. So Jedi Blue is what Google apparently calls this agreement. It is an agreement that exists between Google and Meta, or Google and Facebook if you feel more comfortable with that. It is very interesting. The first thing to point out is that, of course, as you say, the investigations started on the same day, showing in fact that there is cooperation between the CMA and the European Commission, even though there is no formal cooperation agreement. As far as I can make out, this is all about the way in which advertising space is sold, including how it is sold by Google. And it has auctions whereby people can buy space on the Google ecosystem. My understanding is that Facebook itself had the capacity to enter into this market, meaning that Facebook/Meta could have become a competitor of Google in this incredibly important and very lucrative market where Google appears to have a lot of market power. But instead of developing its own capacity, there is some kind of agreement in place, known as the Jedi Blue agreement, between Facebook/Meta and Google, and that apparently is what the Commission and the CMA are investigating as a possible infringement of Article 101/Chapter I. Separately, I see there is also an investigation of Google for possible abuse of dominance.
Caroline Thomas	And so what do you think would have been the potential harm that the Commission and the CMA are concerned with, in terms of the impact of that agreement on competition in the market?
Richard Whish QC	Well, I suppose but I do not know, I suppose the theory is that we’ve got Google – very powerful – Facebook, if you like, a potential competitor to Google, but then a vertical agreement is put in place between them that incentivises Facebook to obtain certain services from Google, rather than itself becoming a competitor of Google in relation to the provision of those services. That’s what I understand it to be about.
Caroline Thomas	Very interesting. And this isn’t the first time that we’ve seen reference to this agreement. I understand that in the US, this is an issue that has been raised by some of the States…
Richard Whish QC	States Attorney Generals, yes. There is litigation in the US, some of it in the public domain. I think Texas is a particular jurisdiction in which this is being investigated.
Caroline Thomas	And that seems to show… We know obviously that the competition authorities speak to each other and watch how each different authority is developing their learning and their jurisprudence around these cases. That seems to indicate that is going on again here.
Richard Whish QC	Well, yes, and I think that this is inevitable because these problems, they are universal, well assuming they are problems. But they are going to be universal by the nature of the internet. There are many issues that need to be investigated, many theories of harm. These are beyond the capacity of any one authority to do, and so it seems to me that if you have a global phenomenon, you need a global response. And from the regulatory side of the table, that does require coordination.
Caroline Thomas	And on that point, the simultaneous announcement by the Commission and the CMA in the UK was quite notable, obviously following Brexit which has affected their ability to cooperate going forwards. How do you see that developing? What I’m particularly interested in is how the investigations might develop and how much cooperation there is still scope to be?
Richard Whish QC	Well, there’s various things to say there. Obviously, in a post-Brexit world, the UK is a third country just as much as any other country is a third country. And there is no formal competition cooperation agreement in place, and any such agreement would be between the UK Government and the European Union, not simply between DG COMP and the CMA, so we wait to see what evolves. In the meantime, of course, competition authorities, they know one another and they talk to one another, and they can cooperate. And I suppose it is relatively easy to cooperate about the date of the initiation of an investigation. As your question implies, it gets more difficult after that because without there being some formal legal power, I can’t give you confidential information and you can’t give me confidential information. So authorities can be cooperative in principle, but when it comes to the detail, there could be difficulties in practice.
Caroline Thomas	Well, we will be very interested to see how this one develops. Thank you very much, Richard.
Richard Whish QC	Indeed, thank you.