Commentary

Google, Facebook Warned A CMA Probe Is In The Post

It has been a massive week in British politics, as Theresa May's deal was rejected, again, and senior cabinet members refused to support the Government's line and vote in favour of a no-deal Brexit.

Nevertheless, in yesterday's developments it may have escaped some people's notice that the Chancellor used his Spring Statement to tell parliament he has asked the Competition and Markets Authority (CMA) to investigate the digital advertising industry. It's important to note that this is the CMO -- not the data watchdog, the ICO. So, he's talking about market dominance here.

Let's cut to the chase. He is talking about the duopoly. His announcement came on the day that a Treasury report, led by Barack Obama's former economics advisor Professor Jason Furman, warned that the CMA should have been stronger in the past on tech mergers and acquisitions and the Government should tackle the might of the tech giants.

One of its recommendations was to force the big online platforms to allow people to take their data with them if they leave and set up an account elsewhere. 

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The report further pointed out that the market is dominated by two players, in particular, Facebook and Google, which do not operate transparently. Put that together with the report saying that the CMA should be given greater powers to intervene when tech giants show growth through acquisition to dominate the market even further, and we have a very clear signal.

The Chancellor has been warned about the duopoly and the very same day he has asked the CMA to investigate. 

This is big news. Quite where it take us is anyone's guess. The CMA had previously said it was minded to investigate the power of the duopoly but has cited Brexit as a difficult impediment, presumably meaning the law could change by the time an investigation is concluded. 

Which brings us to the question of whether the EU grants the UK a delay to the Brexit process that is long enough for an investigation to be held. Again, the rest of the world will be looking at the politics and the way MPs and the EU's 27 members vote, while adland looks at the potential outcome on the power of the duopoly.

The CMA is now in no doubt the Government wants the tech giants probed -- and it is almost inconceivable that an investigation would suggest the status quo is acceptable. 

Google and Facebook are on notice here. A CMA investigation is coming. If a lengthy Brexit delay is offered, you can bet your bottom dollar it won't be good news for the duopoly. 

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