Wednesday 13 March 2019 2:55 pm

Hammond calls for competition probe into digital advertising market

The government will call on the competition regulator to launch an inquiry into the digital advertising sector amid concerns about the dominance of tech giants.

Presenting his Spring Statement this afternoon, Chancellor Philip Hammond said he will ask the Competition and Markets Authority (CMA) to review the market and ensure Google and Facebook “pay their fair share” of tax.

Read more: Tech giants do not face enough competition, review finds

The move follows an independent review, published today, that stated the digital ad market is dominated by two major players and suffers from a lack of transparency.

The report, which was led by former Obama adviser Jason Furman, said tech giants such as Facebook and Google do not face enough competition and called for a new regulator to help level the playing field.

Tech industry body Tech UK said: “Many businesses across the economy depend upon a well-functioning online advertising market. Any intervention must be carefully thought through and targeted.

“Most importantly, the CMA must ensure it has the necessary technical experts available to conduct a review. This will require staff who truly understand the complexities of the adtech market and the role these platforms play in the wider digital ecosystem.”

The Furman review also called for new merger rules to help the CMA clamp down on takeovers that could damage competition and innovation. It said the lack of competition in digital markets meant consumers have limited control over how their personal data is used.

The CMA today welcomed the report’s recommendations and said it is ready to assist the government.

Read more: UK competition policy must be fit for a world of tech giants and cartels

CMA chief executive Andrea Coscelli said: “Technology is transforming the economy and creating new challenges which require a response.

“The expert panel’s report provides invaluable insight into these challenges and how they might be addressed by updating the UK competition framework.”