The British government has announced a series of measures which would limit the power of online giants such as, Facebook and Google on the online advertising market.
The government has decided to follow the proposals made in July by UK’s Competition and Markets Authority which was worried of the American companies dominance.
A new watchdog named “Digital Markets Units” will be responsible to improve competition and better protect users, according to a press release from the Department for Business.
The government recognizes the benefits of these platforms but points to “the concentration of power between a small number of digital companies,” which slows the growth of the sector, reduces innovation and can have negative effects on society. The new code of conduct may force platforms to be more transparent in the services provided and in the way they use personal data.
“The dominance of just a few big tech companies is leading to less innovation, higher advertising prices and less choice and control for consumers. Our new, pro-competition regime for digital markets will ensure consumers have choice, and mean smaller firms aren’t pushed out.” said UK’s Business secretary, Alok Sharma.
With the new measures, consumers will be able to choose whether or not to receive personalised advertising when surfing online.
The new watchdog scheduled to start their work in April, will be able to force Google and Facebook to change their practices if necessary, and have the ability to impose fines for non-compliance.
Newspapers depend on Google and Facebook
The new rules also aim to guarantee fairer commercial contracts between the digital giants and press. Currently about 40% of the visitors press receives online comes from Facebook and Google.
The government wants to prevent the two platforms from using their dominant position to impose unfavourable financial terms on newspapers, especially for new media entrants, which limits their ability to monetize their work.
According to the Competition and Markets Authority (CMA), the total market for online advertising reached £14 billion last year in the UK, with Facebook and Google managing to capture 80% of the market.
In response to the government’s announcements, Google said it looks forward to working “constructively” with the new unit. Meanwhile Facebook, which is about to launch Facebook News in the UK, has promised to help the various press and media present on its platforms.