Assembly's Femi Taiwo on Google-Facebook; GDPR; and Microsoft's Gaming Acquisition

On this week’s episode of TheMadTech Podcast, Assembly’s head of consultancy, Europe, Femi Taiwo, joins ExchangeWire's Grace Dillon and Rachel Smith to discuss the latest news in media, marketing, and commerce.


This week they cover:

- The CEO of Google and their parent-company Alphabet Inc. has been accused of approving what has been deemed an illegal ad deal between the search leader and Facebook. According to a new court filing in a case brought by a coalition of US states’ attorneys general, Sundar Pichai personally signed off on an agreement that would “kill” a competing advertising tool.

The “Google Digital Advertising Antitrust Litigation”, which was first raised in December 2020, alleges that Google sought to maintain their dominance by forging a deal with Facebook that would deter the social media giant from using the rival tool. The agreement, which was code named “Jedi Blue”, reportedly gave Facebook a competitive advantage in online ad auctions carried out via Google, and saw the firm win at least 10% of all the auctions they entered. The new filing asserts that Pichai and Meta chief operating officer Sheryl Sandberg both personally gave their blessing to the terms, with Sandberg describing the pact as “a big deal strategically”. The complaint also alleges that Meta CEO Mark Zuckerberg was approached by executives to sign off on the deal.

In a statement, a Google spokesperson said that the complaint, which is being led by Texas attorney general Ken Paxton, “is full of inaccuracies and lacks legal merit”. Meta, who are not defendants in the case, assert that the deal was positive for advertisers and publishers by generating greater competition for ad placements. The new filing marks the third amendment to the complaint, which saw more evidence of antitrust behaviour added in October and then again in November last year. 


- Google Analytics (GA) has been accused of breaching GDPR through its practice of sharing data collected on an Austrian website with the US. Earlier this month, Austria’s data regulator, Datenschutzbehorde, ruled that information gathered by GA on the nation’s version of NetDoktor was not afforded suitable protection from potential access by US intelligence agencies. The decision comes hot on the heels of a conclusion by the European Data Protection Supervisor (EDSP) that the EU Parliament’s Covid-19 testing website had fallen foul of the legislation by using GA and Stripe.

The two rulings are the first to have been made after the removal of the US-EU Privacy Shield, a legal framework set out to regulate transatlantic data trading, which was deemed illegal under EU data protection legislation in July 2020. Commentators expect that the cases will put pressure on both sides to put a new structure in place to prevent other US cloud services from facing the same complaint.

Whilst not universally applicable, the NetDoktor ruling could be a serious turning point for how data transfers between the EU and US are regulated. noyb, the legal nonprofit organisation who brought the case in 2020, also filed 100 other complaints with the same legal arguments, which are currently under investigation by regulators across 30 European countries. GA has already been removed from one case filed in Hamburg, and could be from a second in the region, whilst Dutch authorities say that a case they’re investigating could conclude with the service being banned.


- US cloud and technology heavyweight Microsoft’s near USD $70bn (~£52.36) acquisition of gaming giant Activision Blizzard has been a huge talking point since it was announced last week. Whilst the size of the price tag has taken up a lot of attention, so too has speculation about the deal’s impact on the future of gaming, with commentators fearing that the buy will dampen competition within the space.

Coming two years after the company’s purchase of Zenimax, the acquisition “shows beyond a doubt that Microsoft is extremely committed to dominating the video-game market”, and could give the XBox maker a monopoly, says The Guardian’s Keza McDonald. While the implications the deal could have for creative teams is unclear, there’s significant concern that the move will see competition within the already narrow market (which is dominated by Microsoft, PlayStation-maker Sony and Nintendo) decline.  

The move could do more than give Microsoft a leg up over their closest rivals, and put the firm in prime position to capitalise off the emerging Metaverse, says McDonald. The company aspire to become “the Netflix of gaming”, and have “laid the foundations” to do so via their Game Pass subscription service, which allows people to access a library of more than 300 games for a monthly fee. With no other gaming companies offering a similar product, and their catalogue set to substantially increase, Microsoft could not only stand to profit disproportionately from the market, but also to have far greater control over how players access and enjoy games in the future.