UK watchdog ‘concerned’ over dominant digital giants

LONDON — Britain must consider tighter regulation of "digital giants" like Google and Facebook, because they could squeeze out potential Internet rivals and hurt traditional media, the competition watchdog said on Wednesday.

The Competition and Markets Authority (CMA), revealing interim findings of a market study into online platforms and digital advertising, said the average Briton spent three hours and 15 minutes online per day — and more than a third of this was on Google or Facebook apps and sites.

"Big is not necessarily bad and these platforms have brought very innovative and valuable products and services to the market," the watchdog said in a statement.

"But the CMA is concerned that their position may have become entrenched with negative consequences for the people and businesses who use these services every day."

The regulator added that Google accounted for more than 90 per cent of all UK search advertising revenues, totalling more than £6 billion.

It found that Facebook accounted for nearly half of all UK display advertising revenues, totalling more than £2 billion.

"A lack of real competition to Google and Facebook could mean people are already missing out on the next great new idea from a potential rival," the CMA continued.

"It could also be resulting in a lack of proper choice for consumers and higher prices for advertisers that can mean cost rises for goods and services such as flights, electronics and insurance bought online.

"The market position 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."

The CMA aims to publish its full findings in July 2020 after a consultation period.

"There is a strong argument for the development of a new regulatory regime," it said.

"This could include rules governing the behaviour of online platforms and giving people greater control over their own data.”

"The most likely outcome at the end of this study will be recommendations to the new [UK] government as it decides whether and how to regulate the digital sector.

"On the other hand, the CMA stands ready to act directly through any or all of its own powers if, ultimately, these issues are not addressed in other ways, whether domestically or internationally."