CMA And ICO: Google And Facebook’s Data Advantages ‘Insurmountable’ Without Regulatory Intervention

The “significant data advantages” enjoyed by Google and Facebook which stifle fair competition exist at such a scale that they are “insurmountable without regulatory intervention,” the Competition and Markets Authority and Information Commissioner’s Office have said in a joint statement.

In the statement, the first of its kind globally, the regulators restated concerns about the impact on news publishers and the public and pledged to work together to “find regulatory solutions that achieve good competition and data protection outcomes.”

Citing the CMA’s landmark market study of digital advertising, the regulators said that news publishers were among the businesses that used data to optimise their services, but had access substantially less data than the platforms.

“The most important factor from a competition standpoint is that market participants compete with one another on a level playing field. In circumstances where competitors in a digital market have significantly differential access to data, then competition ‘on the merits’ is likely to be undermined,” the regulators said.

“As a result, consumers will have less choice, and will ultimately lose out through higher prices, lower quality, and reduced innovation.”

The News Media Association welcomed the market study when it was published and the subsequent launch of the Digital Markets Unit but believes that action needs to be taken now to tackle the impact of the platforms on news publishers.  

A combination of the pandemic and the stifling power of the tech platforms could force more local news media publishers out of business unless the problems are addressed quickly, the NMA has warned.  

The ICO and the CMA’s joint statement also highlighted the CMA’s investigation of Google’s Privacy Sandbox proposals amid concerns about their impact on publishers.

“The CMA highlighted a number of concerns about the proposals’ potential impact, including that they could undermine the ability of publishers to generate revenue and undermine competition in digital advertising, further entrenching Google’s market power,” the regulators said.

The ICO has also announced earlier this year that it was resuming its investigation into real time bidding and the adtech industry, following a pause while it responded to the pandemic.