The Competition and Markets Authority said that if it found that the companies’ market power was harming competition it would consider bringing in a stricter regulatory regime.
The UK’s antitrust authority is starting a long-awaited investigation into the dominance of social media giants including Alphabet Inc’s Google and Facebook Inc in digital advertising markets.
The Competition and Markets Authority said that if it found that the companies’ market power was harming competition it would consider bringing in a stricter regulatory regime. The new rules could limit how the firms set prices with advertisers, it said. Some separation of business units may also be appropriate, the regulator said.
The CMA is joining other European regulators in examining how the online advertising market functions. French and German antitrust authorities have separately been looking at the market, with France’s competition agency flagging the scale of Google’s ad offering and data as a potential concern. Data protection authorities are also scrutinizing the advertising bidding process and how it may share personal information.
The agency said it would consider the way in which the technology firms control personal data and whether it makes it harder for rivals to compete. Executives at the CMA have long been keen to start the probe but were stymied by concerns over Brexit and the regulator’s role when Britain leaves the European Union.
The regulator has a year to conduct the study but will publish its interim findings, including whether a “market investigation reference” is required, within six months.
Officials at the authority have repeatedly signalled that in a post-Brexit world, they’re determined to step up scrutiny of the online space. In speeches and seminars, Chief Executive Officer Andrea Coscelli and other directors went back to previous deals such as Facebook Inc’s purchase of Instagram in 2012, and said approval was a mistake.