Competition watchdog calls for new body to smash power of Facebook and Google

The Competition and Markets Authority (CMA) has called on the government to ‘tackle Google and Facebook’s market power’, in a bold new move.

It has suggested the formation of a new regulatory body to govern the behaviour of major platforms funded by digital advertising.

A year-long investigation by the CMA found that Facebook and Google earn 80% of all digital advertising revenue combined.

‘Google enjoys a more than 90% share of the £7.3 billion search advertising market in the UK,’ according to the CMA report.

‘While Facebook has a share of over 50% of the £5.5 billion display advertising market.’

Examining the business models and behaviour of the major tech companies, the CMA concluded that ‘existing laws are not suitable for effective regulation.’

They added that, while Facebook and Google began by offering genuine advantages to their competitors at the time, they now had ‘such unassailable market positions that rivals can no longer compete on equal terms.’

The CMA identified four factors that make it harder for rivals to compete: an incomparably huge user base on both platforms, an unmatchable access to user data and tailored services, default settings to nudge people into using their services and the presence of the tech giants across multiple markets.

‘What we have found is concerning – if the market power of these firms goes unchecked, people and businesses will lose out,’ says CMA chief executive Andrea Coscelli.

‘People will carry on handing over more of their personal data than necessary, a lack of competition could mean higher prices for goods and services bought online and we could all miss out on the benefits of the next innovative digital platform.’

The ‘scale and nature’ of the problem has led to the CMA calling for an entirely new regulatory body, with powers granted to a ‘Digital Markets Unit’ to tackle Big Tech head on.

This unit will have the ability to impose fines, force Google to open its ‘click and query’ data to competitors, order Facebook to have its platforms work smoothly with competitors, restrict platforms abuse of ‘default’ options and force platforms to separate where necessary to ensure healthy competition.

Google, which claims it worked collaboratively with the CMA on the report over the past year, argues that their services help ‘British businesses of all sizes find customers in the UK and across the world, and supports the websites and products people know and love.’

It points to advertising becoming cheaper and more effective (in the US), and that publishers keep more than 95 percent of the digital advertising revenue they generate when they use Ad Manager.

‘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,’ says vice president of Google UK Ronan Harris.

‘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.’

Facebook, meanwhile, claims that it already has competitors, like Google, Apple, Snap, Twitter and Amazon, ‘as well as new entrants like TikTok, which keeps us on our toes.’

A Facebook company spokesperson also said that the company is ‘exploring new ways through which people can move their data to other services through our Data Transfer Project.’