In the News

CMA argues that Google and Facebook have too much market power

Graham Watson

3rd July 2020

The Competition and Markets Authority have suggested that Google and Facebook, have too much market power in the market for digital advertising.

The numbers are staggering: Google controls 90% of the UK search advertising market, worth over £7bn and Facebook around half of the display advertising market.

According to the CMA "UK expenditure on digital advertising was around £14bn in 2019, equivalent to about £500 per household. About 80% of this is earned by just 2 companies: Google and Facebook."

Read the press release from the CMA here

This raises concerns about their ability to push up prices for consumers and act as a barrier to entry for competitors.

As a result, the regulatory authority is calling for the creation of a Digital Markets Authority to police this area of the market - possibly about 10 years too late - but better late than never. Add in the political complication of negotiating a new trade deal with the US, and the whole issue becomes a lot more complex.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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