The UK’s Competition and Markets Authority said it needed sweeping new powers to roll back the dominance of Google and Facebook in the online-advertising market.
The regulator said a new regime should have the power to order structural changes including potentially forcing Google to open up its click and query data to rival search engines. The regulator said its existing powers were insufficient and an entirely new approach was needed.
“What we have found is concerning -– if the market power of these firms goes unchecked, people and businesses will lose out,” the CMA’s chief executive Andrea Coscelli said.
The proposals serve as a potential template for the US and the EU to tackle digital monopolies as regulators grapple with ways to police the firms in digital-advertising markets. In Britain, Google and Facebook account for 80% of all spending on digital advertising, the CMA said.
The advertising revenues that fuel profits for Google and Facebook are increasingly coming under competition scrutiny, often prompted by complaints from media companies as advertising spend shifts to the web. France’s competition authority has flagged the scale of Google’s ad business as a potential concern while Germany is also looking at the market.
“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,” said Ronan Harris, vice president of Google’s UK arm.
The EU’s powerful competition watchdog is also seeking new powers to chase down online giants, aware that years of probes into the likes of Google haven’t extracted much meaningful change, despite hefty penalties.
Google has largely shrugged off some €8bn in fines and competition orders that tried to stoke more competition for search services.
The largest tech firms, designated as having “strategic market status,” would face an enforceable code of conduct under the new regime, the CMA said.
The CMA, which has long been keen to challenge the power of the tech giants in the UK, has recently used its oversight of acquisitions to scrutinise the firms. But the new powers of a Digital Markets Unit would enable the regulator to go as far as demanding structural changes including splitting operations.