On 3 July 2019, the CMA launched a market study into online platforms and digital advertising. This follows repeated calls from various committees and reviews for the CMA to scrutinise the sector, given its wider implications for the digital economy, including from the Chancellor, the House of Lords, the Cairncross and Furman reviews. This market study will examine concerns raised about the market power of large online platforms, consumer control over data and competition in the digital advertising market – issues which loom large in the global debate about competition reform and the challenges of digital. Given the cross-border nature of the platforms and issues, the CMA intends to continue working closely with competition authorities in other jurisdictions, particularly where investigations of similar concerns are underway. Should the CMA find that the concerns are substantiated, it will consider possible remedies including recommending legislative change.
This market study forms part of the CMA’s new Digital Markets Strategy, which sets out how the CMA will continue to protect consumers in rapidly developing digital markets.
The market study, which will cover both web and app-based digital advertising, will assess three broad potential sources of harm to consumers:
- the extent of the online platforms’ market power in user-facing markets, and what impact this has on consumers;
- whether consumers are able and willing to control how data about them is used and collected by online platforms; and
- whether competition in the digital advertising market may be distorted by any market power held by platforms.
If the CMA finds that the concerns are substantiated, it will consider the need for remedies. Unusually, the CMA has already suggested that a one-off CMA intervention is unlikely to be sufficient and has identified areas where regulatory reforms may be needed. The CMA has indicated that it would be likely to build on proposals made by the Furman Review, including the possible development of an ex ante regulatory regime to regulate the activities of large platforms. This regime could set new rules on the terms on which platforms transact with other market participants, or it could require separation between certain activities in the digital advertising value chain. Other potential areas of reform include improving data mobility and data access, giving consumers increased control over their data, and improving transparency and oversight for digital advertisers and content providers.
The CMA will now gather evidence from a range of interested parties and will use its information gathering powers to collect quantitative information from stakeholders including the online platforms and advertising intermediaries. The CMA is inviting comments from interested parties by 30 July 2019 on the issues raised in its statement of scope.
The CMA will publish its market study report, setting out its findings and any proposed action no later than 2 July 2020.