UPDATED 16:09 EDT / JULY 03 2019

POLICY

UK antitrust watchdog launches probe of Facebook’s and Google’s ad dominance

The U.K.’s antitrust watchdog today opened an investigation to probe Facebook Inc. and Google LLC’s dominance of the digital ad market and also weigh potential regulatory restrictions on the companies.

The two tech giants are sometimes referred to as the “duopoly” in marketing circles. Facebook and Google control an estimated 57.7% of the U.S. digital advertising market, while their market share in the U.K. stands at 62.7%. The latter figure is expected to tick up to 64.7% by 2021.

Through the new investigation, Britain’s Competition and Markets Authority aims to map out exactly how much power the companies wield in the U.K. advertising segment. The probe will revolve around two main priorities. Officials will study whether Google and Facebook harm the competition, as well as look into whether consumers are “able and willing” to control the data collected about them for ad targeting.

“Much about these fast-changing markets is a closed book to most people,” CMA Chair Andrew Tyrie said in a statement. “The work we do will open them up to greater scrutiny, and should give parliament and the public a better grip on what global online platforms are doing.”

The CMA will also look into a number of related areas. Officials plan to evaluate how effectively Facebook and Google combat fake online reviews, plus weigh the need for new regulations on their business practices.

One of the steps the CMA reportedly will consider is preventing the companies from sharing data among services. Earlier this year, Germany’s antitrust watchdog issued a similar ban requiring that Facebook stop merging user activity data across its main social network, Instagram and WhatsApp.

Acquisitions may become more closely regulated as well. The CMA said it will assess whether there’s a case for restricting Facebook’s and Google’s ability to buy smaller companies, a topic raised by U.S. regulators as well. The Federal Trade Commission earlier this year formed a task force focused on the tech industry responsible for, among other things, evaluating acquisitions.

The new U.K. probe adds to the already significant regulatory pressure on Facebook and Google. The social network’s numerous privacy scandals have attracted scrutiny in multiple jurisdictions, while Google is said to be facing an imminent antitrust investigation from the Justice Department. 

Photo: Unsplash

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