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ResPublica’s submission to CMA

2nd August 2019

  • ResPublica

Comments on the CMA Statement of Scope published 3 July 2019

Download the full text of the submission

On 3rd July 2019, the CMA launched a market study into online platforms and the digital advertising market in the UK. CMA wanted to assess three broad potential sources of harm to consumers in connection with the market for digital advertising:

  • to what extent online platforms have market power in user-facing markets, and what impact this has on consumers
  • whether consumers are able and willing to control how data about them is used and collected by online platforms
  • whether competition in the digital advertising market may be distorted by any market power held by platforms

Overall, we welcome the CMA’s announcement of a study into of these markets. In principle, the CMA’s study addresses, or could address, a number of the Furman Review’s recommendations. However, as presently defined, the Scope is unfortunately limited and seeks to address only part of the value chain, and fails to pick up the issue of merger assessment both needing a reset and being among the sources of market power of the current platform operators. While we appreciate that merger control can be assessed as a discreet administrative matter, nevertheless its absence has been a source of market power for many platform companies who have collectively acquired hundreds of companies over recent years.

We are also concerned that the definition of market to be assessed is not apparently to be conducted against economic markets that are affected by the platforms. The Scope draws an arbitrary boundary between products that compete with each other and are funded by advertising, and those which are funded by other means. We consider this to be a significant deficiency.

Our submission, therefore, concentrated on the following 7 points:

  1. Product Market Definition with relation to Funding Mechanisms
  2. Sources of Market Power
  3. Reference Market
  4. Regulatory Arbitrage; Stacks and Ecosystems
  5. Overlapping Jurisdictions and Timeframes
  6. Share of Voice
  7. Institutional Reform

You can find our submission in full here.

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