Advertising review from the Competition Authority to Google and Meta

The Preliminary Report of the Review of the Online Advertising Industry prepared by the Competition Authority has been published.

According to the announcement published on the institution’s website, online advertising has surpassed all traditional advertising channels with the growth rate it has achieved in recent years.

Since last year, online advertising has overtaken television advertising to become the medium with the most advertising spend. The shift from advertising services to online channels has caused some changes in how the supply chain works and competitive parameters.

As a result of all these developments, the need arose to analyze the dynamics of the sector, identify the behavioral and/or structural problems of competition in the sector and develop solutions for these problems in order to implement competition law effectively and correct in these markets. In the framework of the industry review initiated for these reasons, the competition situation in Turkey was analyzed in terms of types of online advertising and the substitution relationship between these types was examined.

GOOGLE AND META INSTALLED

In this framework, it was seen that the display advertising market was concentrated in Meta, and the search advertising market in the eyes of Google’s economic integrity.

Second, online advertising technology services used to buy and sell display ads, which enable the use of complex algorithms and systems to exchange digital ads within milliseconds, enabling the sale of digital advertising space to a large number of advertisers on the websites/apps of multiple publishers. , are examined.

In this context, it has been understood that Google has a high market share in all the services it offers in the ad technology supply chain and that it is active in offering multiple products in each category of ad technology services, increasing the concentration in the market. .

The fact that Google and Meta operate as an ecosystem by offering multiple products and services was another focus of the industry review. In this context, the relationships of complementarity and interdependence between the increasingly growing products and services in the Google and Meta ecosystems, which have been established on the basis of basic platform services, were scrutinized.

While fully integrated ecosystems are assessed to provide significant efficiency gains and benefits for consumers, operating as an ecosystem has also been found to provide a significant data advantage for businesses.

In this context, the types of data collected/processed in online advertising and the data collected by Google and Meta within the framework of the ecosystems in which they are active were compared with data collected by other companies.

While the conversion of user data collected by companies into services through targeted advertising provides significant benefits for every interested party, including publishers, advertisers, and consumers, the data collection has also been seen to lead to privacy issues. privacy for consumers. Therefore, it was stated that it is essential for the industry to establish an optimal balance between the benefits and harms of targeted advertising.

INTENDED TO RAISE AWARENESS

Finally, the competition problems derived from the practices of the companies that are considered to have market power in the sector and the solutions to these problems were investigated.

In this context, it has been determined that concerns about tethering practices, favoritism and data aggregation of high market power platforms can affect the level of competitiveness in the online advertising sector, it has been seen that there is an important problem of transparency in advertising. technology supply chain.

While there is a serious information asymmetry problem in the industry vis-à-vis advertisers and publishers, it has been understood that this problem is seen frequently, especially in the pricing of ad-tech services and the measurement of ads. .

In addition, the complexity of bidding processes has also been found to make advertisers and publishers dependent on ad technology providers to buy and sell inventory.

Another topic discussed within the scope of the industry review were concerns caused by the important role that digital platforms play in delivering news content to readers.

It has been seen that the platforms have become inescapable business partners of the news publishers, and this situation requires the unconditional acceptance by the news publishers of the conditions offered by the platforms, which causes the advertising revenue of the news publishers decline and, in some cases, the shift of these revenues to digital platforms.

Considering the complex functioning of the online advertising sector and the structure of the multilateral market, it was determined that it is of great importance to ensure the continuity of competition in the aforementioned sector and to apply the appropriate competition policies.

In this direction, we sought to raise awareness among market players and sector players through sectoral reviews carried out by the Competition Authority.

OPINIONS CAN BE SUBMITTED

Although the preliminary report, which is the first comprehensive study on the online advertising sector, has been opened to public opinion, it was emphasized that it is of great importance to share the findings, determinations, evaluations and policy recommendations of the report with the Agency. Opinions can be sent by post or by email to [email protected] ​​​​until the end of operations on July 7, 2023. (BRITISH AUTOMOBILE CLUB)