CMA ratchets up attack on online advertising duopoly

duopolyThe boss of the competition regulator has stepped up the UK’s attack on Facebook and Google’s dominance of the online advertising market, claiming the duopoly is far too powerful and calling for other companies to get a bigger slice of the action.

Speaking on BBC Radio 4’s The Media Show, Competition & Markets Authority chief executive Andrea Coscelli said he would like to see regulatory changes to deal with the tech giants’ market dominance, but did not advocate that they should be broken up.

Coscelli said: “We think it would be good if we got to a situation where others had a bigger share of the market. When companies have too much economic power, that creates a number of distortions, first for competitors, secondly for consumers, and at some level potentially in terms of the political process as well, in some cases.

“We, in general terms, like to see markets more competitive, with more players, with more diversity of players, because we think that delivers better outcomes.”

Coscelli said that the fact that Google and Facebook have an 80% share of the UK’s £14bn digital advertising market, was “not an ideal situation”.

Google holds around 90% of the UK’s £7.3bn search advertising market, and Facebook has more than a 50% share of the £5.5bn display advertising market.

In response, a Facebook spokesperson said: “Providing a free service, funded by advertising that is relevant and useful, gives millions of people and businesses in the UK the opportunity to connect and share.

“Advertisers can and do freely move their spending between TV, radio, print, outdoor and online. And in online advertising itself we face significant competition from the likes of Google, Apple, Snap, Twitter and Amazon, as well as new entrants like TikTok, which keeps us on our toes.”

In December, the CMA revealed its new plan to regulate tech giants by issuing the likes of Facebook, Google and Amazon with their own customised rules which, if broken, could result in fines of up to 10% of their global turnover – potentially running into billions of pounds.

The CMA has issued its advice to the Government on the design and implementation of the UK’s new pro-competition regime for digital markets, produced by the Digital Markets Taskforce.

If implemented, the new regime will govern the most powerful tech firms – those with ‘strategic market status’ – meaning those with substantial, entrenched market power and where the effects of that market power are particularly widespread or significant.

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