Ad-tech regulation

The UK’s Competition and Markets Authority has released its final report on online platforms and digital advertising. This started as a preliminary look at possibly monopolistic practices by Google and Facebook, who collectively earn about 80% of UK digital-marketing spend. Parts of the UK press are already saying the report doesn’t go far enough, and that the CMA should have recommended a deeper probe. The report does reach some pretty strong conclusions (“Weak competition in search and social media leads to reduced innovation and choice, as well as to consumers giving up more data than they would like.”), and makes some non-trivial recommendations (“order Google to open up its click and query data to rival search engines to allow them to improve their algorithms so they can properly compete.”).

There’s a lot to unpack here. First, this regulatory-first approach is very European (as opposed to American), but remember the UK isn’t part of the EU now. There are lots of subtleties even in that, but one of the big ones is that this is the UK response to the newspaper problem, in contrast to the ridiculous EU response that I discussed back in April. Second, this continues to highlight the challenges of dealing with global companies on a local basis. This seems pretty clearly to say that Google is going to have to share data with Bing! But, what does that mean, if and when the UK actually makes this a regulation. Will they only have to share information on UK citizens? Third, although they don’t recommend doing it now, they recommend that the new regulatory authority be given the ability to break up companies if it becomes “necessary”. But, what would it mean for a UK regulatory agencies to tell a US company they must break up? That’s just a beginning look at the kind of questions this raises. Almost certainly, the UK will actually go forward with this. full report

Posted in Global Business, Newsletter and tagged , , .

Chris Richardson has strong opinions on just about everything. Just ask.