Do you realise the extent to which you’re being exposed to targeted ads? Here’s why we want to see the power put back in the hands of consumers.
We’ve all been there. One day you’re absent-mindedly looking online at running shoes, toying with the idea of taking up a new lockdown hobby, before logging off and doing something else. The next day, there it is: an advert for the trainers of your dreams, just the right size and with 60 per cent off while stocks last.
If you’ve browsed online recently, the chances are you’ve been exposed to targeted ads. The way it works – companies collect data about you through cookies, which helps them to find out your interests and place things they think you’d like to buy on your screen – has become such an inevitability of modern life that it almost seems redundant to say.
Except many consumers don’t realise the extent to which this is happening to them. We recently asked more than 1,300 people who said they used Facebook at least once a day to check their settings. The average number of websites or apps that Facebook reported tracking them on was 283.
82% of respondents said that number was higher than expected; 84% said that they were surprised by some of the types of organisations that Facebook tracked them on.
Google and Facebook clearly bring very real benefits to their users. Access to information online has never been easier. Nor has keeping in touch with friends and family, the importance of which has only grown in the past year.
The question isn’t whether our lives are better because of the services provided by these companies today, but whether we could be better off by making these markets more competitive and not dominated by a handful of companies.
Concerns about Google and Facebook’s concentration of market power are not new. However, remedies to tackle the issue are. That’s where the Digital Markets Unit (DMU), launching this month, comes in. Its task is to further the interest of consumers and citizens by driving competition and innovation across digital markets, including addressing the market power of big digital firms.
For it to be a success, two key things must happen. First, the government must give it the necessary powers to promote competition so that digital platforms deliver better outcomes for consumers. The current lack of competitive market pressure shuts out other companies vying for a slice of the data pie.
For example, Google’s position as the default search engine on many devices enables it to consistently improve its search results and entrenches its market power. Reforming the market by restricting such default positions could stimulate growth and innovation. It would also provide consumers with a genuine choice of provider, rather than the decision in effect being made for them.
Second, the DMU should have the power to introduce the right remedies to address consumer harm, especially when it comes to giving consumers more control over the collection and use of their data. Having a Facebook account shouldn’t mean a trade off in which the consumer is expected to ‘pay’ for a level of service by giving up their right to privacy.
Some consumers like being shown targeted ads, but they should have to choose for their data to be used in this way.
Consequences of inaction
Tackling companies as entrenched in public life as Google and Facebook will be a difficult task. But the consequences of inaction are also costly, not least because uncompetitiveness leads to more sluggish economic growth.
After years of consumers being powerless in the face of these tech giants, the CMA is now showing it’s prepared to step up and take action to restore the balance in favour of the consumer and competition, and that’s good to see.
Its recently announced antitrust investigation, this time into Facebook, is a step further in the right direction. The DMU has the potential to do even more to ensure the UK has dynamic and competitive digital markets and put power back in the hands of consumers.
The government must give it the powers to do so. Do you agree?