Major online platforms that currently dominate the UK digital advertising market will come under intense scrutiny after the country’s competition watchdog launched an official investigation into their practices, including how they use consumers’ data.

The Competition and Markets Authority (CMA) announced in a statement this week that it aimed to “lift the lid” on how major online platforms work, especially around their collection of personal data and how they use advertising to monetise content.

Its inquiry, which will report back to Parliament and the Government, will consider the sources of market power behind companies like Facebook and Google, the way they collect and use personal data and whether competition in digital advertising is “producing good outcomes for consumers”.

The CMA’s intervention comes just two weeks after a hard-hitting report from the Information Commissioner’s Office severely criticised the way personal data is misused in programmatic advertising.

It also comes after at least two years of damaging headlines about brand safety online, the placement of ads next to inappropriate content, fake news, lack of transparency and the collection of people’s data without their consent.

Regulators have been stepping up their counter-measures and the CMA’s latest investigation will form part of its wider digital markets strategy.

It also follows a review into the UK digital advertising market by Jason Furman, a former economic adviser to US President Barack Obama, who concluded that it is dominated by two players and suffers from a lack of transparency.

According to WARC Data figures the share of UK online spending taken by search and social media, which can be taken as a proxy for Google and Facebook, was 72.2% in 2018, up from 70.3% in 2017.

“As part of the work announced today, we will be advising Government on how aspects of Furman can most effectively be implemented. Much about these fast-changing markets is a closed book to most people.,” said CMA chairman Andrew Tyrie.

“The work we do will open them up to greater scrutiny and should give Parliament and the public a better grip on what global online platforms are doing.”

Also commenting on the watchdog’s forthcoming work, CMA chief executive Andrea Coscelli said: “The market study will help us further lift the lid on how major online platforms work, especially how they collect and use personal data, how they monetise their content through digital advertising, and what this means for competition.”

Sourced from CMA; additional content by WARC staff