The Competition and Markets Authority (CMA) has recently published an invitation to take part in its market study into online platforms and the digital advertising market in the UK.
This market study has not come out of the blue. The ICO recently published a report on adtech in which the ICO concluded that many actors involved in real time bidding were in breach of the General Data Protection Regulation 2016/679 (GDPR). Earlier this year Lord Tyrie, chair of the CMA, wrote of the need for reform of the UK competition regime, likening the current regime to “an analogue system…in a digital age”. In particular, Lord Tyrie identified the need for regulators to combat “rapidly-emerging forms of consumer detriment” caused by digital markets, as well as address the “public doubt whether markets work for their benefit”.
The topics set out for the market study address exactly these points raised by Lord Tyrie.
The market study seeks further information on the following three key themes.
i) The market power of online platforms
The study seeks to better understand the role of data used by online platforms, and whether incumbent actors have raised barriers to entry for new market participants by monopolising data. The CMA is keen to investigate ‘walled gardens’ of data collected by online platforms which then only share aggregated data to partners. The CMA has identified this as a key concern in its investigation.
ii) Consumer agency
Do consumers have the knowledge, skills and desire to control the collection and processing of their data? This is a key question the CMA hopes the market study will shed some light on. It is hoped that this fact-gathering stage will eventually lead to measures recommended by the CMA which will facilitate greater consumer control of data. This, in turn, may increase market competition and deal with some of the issues around entrenched market actors to be further explored under the first key theme.
iii) Competition among digital advertisers
The CMA would also like to better understand what effect market concentration is having on the digital advertising market. The CMA acknowledges the complexity of the market, but also identifies a lack of transparency in how it operates. In particular, a better understanding of money and data flows will be a priority for the market study.
The CMA has focused the scope of its study on online platforms that are funded by digital advertising. The CMA study will also differentiate itself from the UK Government’s recent report and white paper on online harms by focusing on the digital advertising market rather than whether instances of digital advertising involve user deception.
Adtech, digital advertising, and the operations of online platforms seem to have piqued the regulatory ear recently. The CMA invites comments from all interested parties on the issues raised in the study scope until 30 July 2019. If you would like to take part, please review the statement of scope and email responses to the CMA here. The CMA aims to publish its final report in July next year. We expect further developments in this area in the meantime, so keep an eye on our blog for upcoming alerts.