Antitrust Watchdog Calls On UK Government to Tackle Tech Giants' Power -- Update
July 01 2020 - 9:27AM
Dow Jones News
--The Competition and Markets Authority has called on the U.K.
government to introduce new regulations for digital advertising
--Existing laws aren't suitable to regulate the likes of Google
and Facebook, the regulator said
--Google and Facebook said they face fierce competition, but
vowed to cooperate
By Adria Calatayud
The U.K.'s antitrust watchdog on Wednesday called on the U.K.
government to introduce a new regulatory regime to boost
competition, and tackle Google and Facebook Inc.'s market power in
digital advertising.
The Competition and Markets Authority said existing laws aren't
suitable for effective regulation of the behavior of major
platforms funded by digital advertising. This conclusion followed a
year-long examination of online platforms and digital advertising,
after which the CMA said Facebook and Google--part of Alphabet
Inc.--have developed such unassailable market positions that rivals
can no longer compete on equal terms.
The regulator said Google and Facebook earn about 80% of
digital-advertising spending in the U.K., which was around 14
billion pounds ($17.36 billion) last year.
"What we have found is concerning--if the market power of these
firms goes unchecked, people and businesses will lose out," CMA
Chief Executive Andrea Coscelli said.
The regulator proposed a new regulatory regime that would
include opening up Google's click-and-query data to rival search
engines and increase Facebook's interoperability with competing
social media platforms, among other measures. The CMA said new
regulations should have the ability to order the separation of
platforms where necessary to ensure healthy competition.
In response to the CMA, Google and Facebook said they face
competition in the advertising market, both from online and offline
players, and vowed to work with the U.K. government.
"Advertisers today choose from a wide range of platforms that
compete with each [other] to deliver the most effective and
innovative ad formats and products," Google's U.K. and Ireland vice
president Ronan Harris said.
Facebook said providing a service funded by advertising gives
millions of people and businesses in the U.K. the opportunity to
connect.
"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 Facebook spokesperson
said.
The CMA said Facebook and Google's large user base is a source
of market power and each has unmatchable access to user data. Both
use default settings to nudge people into using their services and
giving up their data, and their presence across different markets
makes it harder for rivals to compete, the regulator said.
Furthermore, protecting people's control over their data is
paramount to privacy and to a healthy market, the CMA said.
The British regulator said, while its recommendation is
U.K.-focused, the problems it has identified are international in
nature.
The CMA also said it is launching a taskforce together with
privacy watchdog Information Commissioner's Office and media
regulator Ofcom that will advise the government on how to design
new rules. The group will deliver advice to the government by the
end of the year, the CMA said.
Write to Adria Calatayud at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
July 01, 2020 09:12 ET (13:12 GMT)
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