Dominance of Google and Facebook should be tackled, says competition watchdog

David Prior's picture
by David Prior

The UK should consider introducing regulations to tackle the dominance of online giants such as Google and Facebook, the Competition and Markets Authority (CMA) has said.

The watchdog's interim report into the UK digital market emphasized the extent to which the tech behemoths dominate, with Google controlling more than 90% of the UK’s £6bn search advertising market, while Facebook has almost half of the £5bn internet display advertising market.

And the CMA believes the firms' dominance could be harming competition.

It said: “We are concerned that they are both now so large and have such extensive access to data that potential rivals can no longer compete on equal terms.

“The profitability of both Google and Facebook has been well above any reasonable estimate of what we would expect in a competitive market for many years.

“Weak competition in digital advertising can increase the prices of goods and services across the economy and undermine the ability of newspapers and others to produce valuable content, to the detriment of broader society.”

It also said that the dominance of Google and Facebook "may potentially be undermining the ability of newspapers and other publishers to produce valuable content as their share of revenues is squeezed by large platforms".

And it criticised a lack of transparency about how their platforms work, with publishers reporting significant drops in web traffic after opaque updates to Google and Facebook algorithms.

The CMA has opened a consultation on a range of interventions, which could include breaking up Google by forcing it to separate its ad server arm from the rest of the business, or requiring Facebook to open up specific features to competitors.

It is due to publish its final report next summer.