"Google and Facebook have been targeted by a fightback from the UK competition regulator that could envelop them inside a new antitrust regime for the multibillion-pound digital advertising sector.
The Competition and Markets Authority, which today [1 July 2020] published the final report on its year-long market study into online platforms and digital advertising, has made it clear to the tech giants that their heft necessitates a slew of structural or behavioral controls.
The CMA's drill-down into the impact that digital ad market power can have on businesses and consumers — notably those whose data is processed and monetized by free-to-use, advertising-funded platforms — builds the watchdog’s enforcement case. The ongoing Covid-19 home-isolation measures, which have boosted the use of online platforms, has only sharpened the file.
But the variety and complexity of reforms proposed for online ad buying and selling, for ads served on websites, social media and search platforms, and for ad data management, will stretch the CMA. The watchdog's coming struggle to reshape the behavior of two of the world's most successful and influential companies will be long and ugly.
Measures
The CMA's proposals are consequential, however, and it is a battle with which Google and Facebook will have to engage. The regulator laid several of them out last December in an interim report, and followed it up today in even greater detail that ran to several hundred pages.
Among recommendations are a range of potential interventions to improve competition in the digital market space. These range from a code of conduct to govern the behavior of platforms with market power, to data-access and platform interoperability interventions that address Google and Facebook's ad impact, to deeper structural change.
For Google, the latter includes being forced to separate off of its ad-serving platform — which prices and places ads on third-party websites — and to keep at arm's length its powerful website analytics business, which can track news searches, among other functions. Contracts with mobile-phone providers to make Google the default search engine on handsets and other search-engine settings are also in the strike zone.
For Facebook, measures faced include much greater third-party data access and mandatory capability for consumers to move their data to rival social-media platforms.
Both companies also face being forced to hand over users' information to independent data managers, said the CMA, as it called for a Digital Markets Unit under a new regime to be equipped with effective powers."
