In times when platform capitalism is the language spoken worldwide, countries and regions are taking measures to try to reverse the effects of the constant mediation of human relationships by platforms, and the consequences this brings in terms of generating monopolies, both economic and of “spaces” where humans interact.
Brand Authority and Competition
Online Platforms and Digital Advertising
Market Study – Final Report
July 1, 2020
Translation by Martín Rodriguez Kedikian for the Cátedra Datos Piscitelli – University of Buenos Aires.
Original available at: https://assets.publishing.service.gov.uk/media/5efc57ed3a6f4023d242ed56/Final_report_1_July_2020_.pdf
Summary
Advertising-funded platforms provide highly valuable services, allowing people to find information instantly and connect with family and friends from all over the world—without any direct cost to the consumer. Google and Facebook are the largest platforms of this kind at the moment, with more than a third of the total user time in the UK spent on their sites. Google holds more than 90% of the £7.3 billion spent on search engine advertising in the UK, while Facebook has more than 50% of the £5.5 billion spent on display marketing. Both companies have been highly profitable for many years. Both Google and Facebook grew by offering better products than their rivals. However, they are now protected by such strong advantages— including network effects, economies of scale, and unparalleled access to user data—that potential rivals can no longer compete on equal terms.
These issues matter to consumers. Weak competition in search and social media results in reduced innovation and choice, as well as the delivery of more data than consumers would like. Poor competition in digital advertising raises the prices of goods and services throughout the economy and pressures media outlets to produce lower-quality content, to the detriment of society as a whole. The concerns we’ve identified in these markets are so broad and self-replicating that our existing powers are insufficient to address them. We need a new regulatory approach—one that can cover all fronts simultaneously, with powers to act quickly to tackle both the sources of market problems and their effects, and with a regulatory body that can monitor and adjust its interventions in light of the ever-changing market conditions.
We are therefore recommending that the government implement a regulatory regime aimed at promoting competition for online platforms. A Digital Markets Union (DMU) would be empowered to establish a code of conduct to regulate the behavior of platforms with market power, ensuring timely intervention before irreversible damage is done to competition. The DMU should also have the power to address the sources of market power to increase competition, including powers to enhance interoperability and provide access to data, to increase consumer options, and to order platform breakups, if necessary.
We have identified a wide range of specific interventions that a DMU could introduce into its regime to restrict the market power of Google and Facebook, from ordering Google to open its data to rival search engines and separating aspects of its display advertising business, to asking Facebook to increase its interoperability with its competing social media platforms and giving consumers the choice of whether they want personalized advertising. We are now moving forward with notifications for the development of a regulatory regime in favor of competition through the Digital Markets Task Force.
