The UK’s Competition And Markets Authority (CMA) on Wednesday launched a “market study” into digital online advertising practices, focusing on Facebook, Google and other platforms that collect data and use advertising to subsidize revenue.
This study is part of the CMA’s Digital Markets Strategy, an approach to protecting consumers online while ensuring competitive digital markets. It will analyze three “potential sources of harm to consumers” in connection with digital advertising.
Those include to what extent online platforms have market power in user-facing markets, and what impact this has on consumers, whether consumers are able and willing to control how data about them is used and collected by online platforms, and whether competition in the digital advertising market may be distorted by any market power held by platforms.
The statement summary -- which calls out Google and Facebook, along with their subsidiaries -- acknowledges that services like search, display and video advertising provided by online platforms offer positive benefits, but also raise concerns about market dominance and harming the competition and consumers by creating barriers to new entrants.
The study will only focus on platforms funded by digital advertising. It will consider whether consumers have the knowledge and desire to control how data about them is collected and used by online platforms, and if they have the skills to exercise their choices.
The CMS also could "consider the case for limiting the ability of platforms to share data across applications."
The CMA also identified five reasons why regulatory reform may be required. These include the ability to increase competition from data mobility and open standards; the ability to give consumers greater protection when it comes to collecting their data; limiting the ability of large platforms to dominate a market; and improved transparency for digital advertising and providers. And if the CMA concludes “there is a case for any of the above interventions, we will consider the appropriate institutional arrangements required to deliver them.”
The market study will take about a year, and the final report will be published no later than July 2, 2020.
An interim report will be published by January 2, 2020. The CMA said it will accept comments on the topic through July 30 by email.