CMA interim report finds that Google and Facebook have marker power in their markets

CMA interim report finds that Google and Facebook have marker power in their markets

The Competition and Markets Authority (CMA) has issued its interim market study report on online platforms and digital advertising.

The CMA finds that both Google and Facebook have market power in their respective markets.  It also notes features of those markets, including economies of scale and a lack of transparency can lead to a strong entrenching effect.

The CMA found that profitability was well above any reasonable estimate of what it may expect in a competitive market.  On this basis and other findings in the report the CMA thinks there are reasonable suspicions that competition is not working as well as it should.  It believes that these findings support the development of a dedicated regulatory regime to regulate the activities of online platforms fuelled digital advertising.

Any remedy would be UK-only.  However, the CMA has echoed concerns of other regulators including the Australian Competition and Consumer Commission’s recommendations to address a lack of “significant reflection” on the effects of digital platforms.

The CMA deadline for responses to the interim findings is 12 February 2020. The deadline for the final report is 2 July 2020.