UK needs tougher rules to tackle online giants

The UK should consider tougher rules for online giants like Google and Facebook as their dominance in digital advertising could be harming competition.

So claims the Competition and Markets Authority (CMA), which has released an interim report looking at how companies operate.

The CMA set out an investigation into major online platforms in July this year. It found that last year Google accounted for more than 90% of all revenues earned from search advertising in the UK and that Facebook accounted for almost half of all display advertising revenue.

While it stressed that "big is not necessarily bad" the CMA said it was concerned that these companies had become "entrenched with negative consequences" for those that use and depend on these services.

"Most of us visit social media sites and search on the internet every day, but how these firms work can be a mystery," said CMA chief executive Andrea Coscelli. "Digital advertising fuels big businesses like Google and Facebook and we have been building a picture of how this complex new market works.

"We've looked especially at how these firms collect and use people's data, how they monetise it and what this means for rival companies who want to compete, as well as the people and businesses using these services every day."

Coscelli added that the CMA will present its findings to Boris Johnson's newly elected government as well as seeking comment on them.

Part of the issue for the CMA is that both Google and Facebook appear to offer free services, but consumers pay for them indirectly by providing their attention and personal data, which platforms use to sell digital advertising.

People in the UK spend an average of three hours and 15 minutes online each day, according to the CMA, and more than a third of that time is spent on sites owned by either Google or Facebook. It was also revealed recently that the four most used apps in the world all belong to Facebook: Instagram, WhatsApp, Messenger and Facebook itself. As a result, the digital advertising sector is now worth around £13 billion - much larger than any other form of advertising, the CMA said.