The UK Competition & Markets Authority (CMA) has published its final report of a market study into online platforms and digital advertising. It has concluded that competition in these markets is not working well, leading to substantial harm for consumers and society.
The report finds that existing laws are not suitable for effective regulation of digital advertising markets, with the CMA recommending new pro-competition regulation to control the behaviour of major platforms funded by digital advertising, such as Facebook and Google. The study shows that UK expenditure on digital advertising reached around GBP 14 billion in 2019, equal to around GBP 500 per household, with around 80 percent of this earned by Google and Facebook. Google controls an over 90 percent share of the GBP 7.3 billion search advertising market, with Facebook controlling over 50 percent of the GBP 5.5 billion display ad market.
Google has seen its revenue per search more than double since 2011, with Facebook's average revenue per jumping from less than GBP in 2011 to over GBP 50 in 2019. The CMA is deeply concerned that Facebook and Google have now established such unassailable market positions that rivals can no longer compete on equal terms. It is recommending a new regulatory regime with a new Digital Markets Unit to enforce a code of conduct on platforms with positions of market power. This Unit should also have the power to force Google to open up its click and query data to rival search engines; and order Facebook to increase interoperability with rival social media platforms.
