UK to curb Google, Facebook’s power

Britain’s competition watchdog is following Australia’s lead, flagging new regulation for big tech.

ACCC boss Rod Sims said the likes of Google and Facebook had almost unfettered market power when it came to ­online advertising. Picture: AP

Britain is following Australia’s lead and taking on the US tech giants, with its competition watchdog flagging new regulation designed to curb the market dominance of Google and Facebook.

The Competition and Markets Authority (CMA) said a lack of competition to Google and Facebook meant consumers were likely paying too much for products like flights, electronics and insurance.

The CMA, in comments similar to the ACCC last week, also said the tech giants displayed a “lack of transparency” in the way they operate, and that there were concerns over how they collected data.

The company’s continued dominance could have "negative consequences for the people and businesses who use these services every day" and that new regulation was warranted, the watchdog said.

CMA chief executive Andrea Coscelli said on Thursday that Google earned more than 90 per cent of all revenue for search advertising in Britain in 2018, with revenue of about 6 billion pounds ($11.43bn), and Facebook accounted for almost half of all display advertising last year.

“Most of us visit social media sites and search on the internet every day, but how these firms work can be a mystery,” Ms Coscelli said in a statement.

"At the end of the study, we'll present our findings to the new government as they decide whether and how to regulate what is an increasingly central sector in all our lives."

The news comes after the Australian government announced last week it would establish a new unit within the ACCC to monitor and report on the state of competition and consumer protection within digital platforms.

The new watchdog, which has been bolstered by a $27m cash ­injection from the government, will hit the ground running with an examination of online advertising and ad-tech services that determine how consumers are targeted through the use of data.

The branch will monitor and report biannually on digital platforms, take enforcement action as necessary and conduct inquiries.

It comes after ACCC boss Rod Sims said the likes of Google and Facebook had almost unfettered market power when it came to ­online advertising.

“(The new unit) will do monitoring, which will tell us what developments there are in terms of new markets the platforms have gone in, what they’ve said they’re going to do and are they doing it, what have they said they might do overseas that they’re not doing, how they’re tracking people’s data now, and monitoring so that we’re all up to date,” Mr Sims said.

“It will also do enforcement ­action. If we see breaches of competition or consumer law, we can take action. And of course it will be doing the ad-tech inquiry.

“It will be talking to the Prime Minister’s digital taskforce and other government bodies to ensure things aren’t dropping through the cracks.”

The CMA invited comments on its findings by February 12, 2020.

with Reuters