Germany opens antitrust probe into online advertising

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FRANKFURT/BERLIN: Germany’s antitrust regulator is opening an investigation into online advertising, responding to concerns expressed by advertisers and publishers over the “significant” market position of US platforms Google and Facebook.

The probe by the Federal Cartel Office opens a second front after it said in December that Facebook, the social network used by more than 2 billion people, had abused its dominant position to collect their personal data.

“A small number of large companies like Google and Facebook have arisen and attained a significant market position,” antitrust office chief Andreas Mundt said in a statement on Thursday.

Some market participants, he said, viewed the two as having established closed systems – also known as ‘walled gardens’. This raised concerns about access to, and use of, consumer data.

Estimates of the size and breakdown of the German online advertising market vary, but the cartel office put it at between €5bil (RM24.31bil) and €9bil (RM43.76bil) last year.

Google, a unit of tech giant Alphabet, and Facebook are estimated to have taken half of online ad revenue worldwide in 2017 and more than 60% in the United States, according to research firm eMarketer.

The antitrust office said it was investigating the sector, and not individual firms. It would hold meetings and do survey research this spring as a basis for its final report.

“We will cooperate fully with the Bundeskartellamt on this sector inquiry and welcome the opportunity to share our insights on the dynamic and competitive nature of the advertising industry,” a Facebook spokesperson said.

Google also said it would cooperate fully, but declined further comment.