Trade bodies react to CMA digital ad market report
The Competition and Markets Authority (CMA) has issued a warning to government that Google and Facebook have now attained “such unassailable market positions that rivals can no longer compete on equal terms”.
Consequently, the CMA has recommended the government creates a “Digital Markets Unit” with the power to force competition where none exists.
Examples of what this could entail include forcing Facebook to give users the option to opt out of personalised advertising; requiring Google to share data about user behaviour with competitors; or even forcing Facebook to sell Instagram.
The CMA warned that the firms’ dominance over the digital ad market raises barriers for new competitors and may also inflate prices for consumers.
Google has more than 90% of the £7.3bn search advertising market in the UK, while Facebook takes more than half of the £5.5bn UK online display advertising market.
The report also notes that the dominant position of the duopoly means they have a “profound” impact on publishers who rely on the tech giants for almost 40% of traffic.
Responding to the report, here is what the ad market’s leading trade bodies said:
“ISBA welcomes the CMA’s comprehensive and detailed report – and supports its call for a new regulatory system, to be legislated for by government.
“It is encouraging to see that that the findings of the ISBA/AOP/PwC Programmatic Supply Chain Transparency Study have been recognised and reinforced.
“Our study backed the fundamental principles of transparency and accountability which are essential for trust and competition. The CMA report underlines just how important these are, as well as how it is essential that people have more control over their data.
“We will work with our members as we discuss the recommendations of this report, and we look forward to engaging fully with the new Digital Markets Taskforce.”
“The IPA welcomes the CMA report’s recommendations that centre on the high-level objectives of fair trading, open choices, and trust and transparency.
“Having an enforceable code of conduct for online platforms with these objectives in mind can only be a positive development for the industry and the public. We look forward to engaging with the Digital Markets Taskforce to help deliver a robust Digital Markets Unit.
“In addition, we particularly welcome the report’s detailed analysis of the open display marketplace supporting the case for greater transparency over ad tech fees and verification data, and recommending the DMU being empowered to introduce a transaction ID. This dovetails with the interim findings of the cross-industry JICWEBS Distributed Ledger Technology Pilot referenced in the Advertising Association’s submissions to the CMA and indeed DCMS.”
“We responded to the CMA’s interim report in April and look forward to reading the CMA’s full report in more detail as well as its recommendations.
“It’s worth emphasising that online advertising can deliver two key benefits: more relevant and timely adverts which is good for both consumers and advertisers and it supports a range of online services and content.
“We have always believed in fair competition and transparent markets and recognise that Competition laws, written in the analogue era, need updating. We are ready to input into the future work of the CMA, in particular around the proposed Code of Conduct and the establishment of a Digital Markets Unit.”
“The CMA has acknowledged and responded to many of the concerns of the News Media Association and the industry in this thoughtful report.
“We support the recommendations for a new regulatory regime for the tech platforms, a new code of conduct to govern their behaviour, and the establishment of a Digital Markets Unit to enforce this code. We also note that a full market investigation has not been ruled out if progress is not made.
“We hope that the Government will now act swiftly to implement these recommendations and restore balance to a digital ecosystem which for far too long has left news media publishers unable to realise the true value of their journalism.”