The takeaways
- Taboola and Outbrain’s merger will not face investigation from the U.S. Department of Justice for possible antitrust violations.
- The U.K.’s Competition and Markets Authority, which believes their combined 80% UK market share will dwarf other publishers and advertisers, continues to scrutinise it.
- Taboola’s buyout of Outbrain will increase its audience of “clickbait” consumers to almost 2 billion.
What happened?
Taboola’s $250 million buyout of Outbrain is proceeding without further scrutiny from the U.S. Department of Justice. The department’s antitrust division recently notified both companies that it has closed its investigation and will take no further action. However, it still has to clear the U.K.’s Competition and Markets Authority, which flagged regulatory issues regarding the advertising merger.
The competition watchdog raised concerns that Taboola and Outbrain’s merger will give them an over 80% combined UK market share, leading to greatly reduced market competition. The CMA pledged to investigate further unless actions are taken to address them. Potential consequences include unfair terms for news publishers and reduced revenue shares.
Taboola and Outbrain are native advertising platforms that distribute viral content – often called “clickbait” – to publishers’ pages and share the revenues. The two companies characterize their merger as creating monetization outside of Big Tech, specifically Google and Facebook. By merging, they will employ 2,000 employees worldwide with over 20,000 clients in 50+ countries.
Why this matters
Big Tech’s digital advertising and content dominance has led to legal challenges. Next week, the CEOs of Amazon, Apple, Facebook and Google appear before the House Judiciary Antitrust Subcommittee. Additionally, Google faces antitrust investigations from multiple state attorneys general, as well as the Justice Department.
Meanwhile, some are questioning what publishers can expect from the deal. A source spoke to Adweek about the implications for yield, asking, “Will the joined forces allow more yield to flow through to publishers? Or does this actually remove some competition in such a way that yield suffers?” These echo the CMA’s statement that UK publishers “will have a reduced choice of supplier for content recommendation services.”
In any event, Taboola’s expectations of scaling post-merger are clear. Their expected new audience numbers almost 2 billion consumers.
