The CMA is calling on the government to introduce a new pro-competition regulatory regime to tackle Google and Facebook’s market power.
The Competition and Markets Authority said Wednesday that it had proposed the creation of a “Digital Markets Unit” designed to rein in platforms with “a position of market power” in digital ads.
The new unit would enforce a code of conduct on Google, Facebook and other major players in the industry to make sure they don’t “engage in exploitative or exclusionary practices.” It would have the power to impose fines on the companies if necessary.
It would also be able to order Google to share click and query data with rival search engines and force Facebook to give consumers a choice over whether to receive targeted advertising, the CMA said.
The CMA said it wants to “lift the lid on how advertising revenue drives the business model of major platforms.” According to the regulator, around 80% of the £14 billion (dollar conversion) of U.K. spending on digital ads in 2019 went to Google and Facebook. Google has a more than 90% share of the search advertising market in the UK, the CMA said, while Facebook controls more than 50% of the display advertising sector.
“Advertisers today choose from a wide range of platforms that compete with each to deliver the most effective and innovative ad formats and products,” Ronan Harris, Google’s vice president for the U.K. and Ireland, said in a statement Wednesday. “We support regulation that benefits people, businesses and society and we’ll continue to work constructively with regulatory authorities and Government on these important areas so that everyone can make the most of the web.”
Facebook said the company would engage with U.K. government bodies “on rules that protect consumers and help small businesses rebuild as the British economy recovers” from the coronavirus pandemic.
“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,” a spokesperson for the company said in a statement. “Giving people meaningful controls over how their data is collected and used is important, which is why we have introduced industry leading tools for people to control how their data is used to inform the ads they see.”
