No one can compete with Google... unless it opens its click-and-query data to rivals, says UK markets watchdog

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The UK's Competition and Markets Authority (CMA) has proposed that Google should open its click-and-query data up to rival search engines to help them improve search algorithms and properly compete with the web giant.

The CMA, a non-ministerial government department with powers to fine companies, discussed the move in the context of a new "Digital Markets Unit" aimed at creating a pro-competition regulatory regime for dominant online companies.

It was also suggested that Facebook should increase its interoperability with other social media platforms – as long as consumers consent to data sharing, of course.

In its report, Online platforms and digital advertising [PDF], the CMA said UK spending on digital advertising was around £14bn in 2019, or about £500 per household. Just two companies, Google and Facebook, account for 80 per cent of that market.

Google's revenue per search has more than doubled since 2011, while Facebook's average revenue per user has increased from less than £5 in 2011 to over £50 in 2019. The CMA found that Google's prices are around 30 per cent to 40 per cent higher than those of Microsoft's Bing search engine when comparing like-for-like search terms on desktop and mobile.

CMA chief exec Andrea Coscelli said: "Through our examination of this market, we have discovered how major online platforms like Google and Facebook operate and how they use digital advertising to fuel their business models. What we have found is concerning – if the market power of these firms goes unchecked, people and businesses will lose out.

"People will carry on handing over more of their personal data than necessary, a lack of competition could mean higher prices for goods and services bought online and we could all miss out on the benefits of the next innovative digital platform.

"Our clear recommendation to government is that a new pro-competitive regulatory regime be established to address the concerns we have identified and regulate a sector which is central to all our lives."

The CMA said the scale of the issue with Facebook and Google's market dominance required a new pro-competition regulatory regime to ensure that "users can continue to benefit from innovative new services; rival businesses can compete on a level playing field and publishers do not find their revenues unduly squeezed".

"Google and Facebook have such entrenched market power as a result of these self-reinforcing entry barriers, that we have concluded that the CMA's current tools, which allow us to enforce against individual practices and concerns, are not sufficient to protect competition," the report said.

The function of the enforceable code of conduct would be to govern the behaviour of platforms that enjoy a position of market power. To this end, the CMA is launching a Digital Markets Taskforce, which will include the Information Commissioner's Office and Ofcom, to advise the government on how a new regulatory regime for digital markets should be designed. It expects to offer this advice by the end of the year.

A spokesperson for Facebook sent us a canned statement:

"Providing a free service, funded by advertising that is relevant and useful, gives millions of people and businesses in the UK the opportunity to connect and share. We face significant competition from the likes of Google, Apple, Snap, Twitter and Amazon, as well as new entrants like TikTok, which keeps us on our toes.

"Giving people meaningful controls over how their data is collected and used is important, which is why we have introduced industry leading tools for people to control how their data is used to inform the ads they see. We’re also exploring new ways through which people can move their data to other services through our Data Transfer Project. We look forward to engaging with UK government bodies on rules that protect consumers and help small businesses rebuild as the British economy recovers."

The Register has approached Google for a response. ®

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