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(This message was added in version 6.7.0.) in /home4/scienrds/scienceandnerds/wp-includes/functions.php on line 6114Source:https:\/\/techcrunch.com\/2023\/06\/01\/fco-programmatic-ad-market-report\/<\/a><\/br> Germany\u2019s antitrust watchdog made some interesting comments vis-\u00e0-vis the programmatic advertising market yesterday \u2014 which question the appropriateness and sustainability of the (still dominant) tracking-and-profiling ad targeting business model.<\/p>\n In a statement<\/a> accompanying publication of a sectoral report (the full report is here<\/a> in German), the Federal Cartel Office\u2019s (FCO) president, Andreas Mundt, wrote:<\/p>\n We should seriously ask ourselves whether we want to have virtually \u201ctransparent\u201d internet users only because we are supposed to buy certain products or services. What appears to be particularly problematic from a competition point of view is that only a very small number of companies have access to large amounts of a variety of current, first-hand user data. This imbalance must always be taken into account in the case of potential interventions.<\/p>\n<\/blockquote>\n The FCO\u2019s review of the programmatic (non-search) ad sector found insufficient transparency for market players other than Alphabet, the dominant force \u2014 which it observes is \u201cpresent at almost all levels of the value chain of non-search online advertising and has an extraordinarily strong market position with regard to practically all relevant services.\u201d<\/p>\n This is a more typical observation for an antitrust regulator to make (and something other competition watchdogs have previously called out in their own reviews of the online ad market, such as the U.K.\u2019s CMA<\/a> in its 2020 market study). Google\u2019s ad business also remains under antitrust probe in a number of European markets.<\/p>\n But the FCO\u2019s wider questioning of the programmatic industry\u2019s surveillance of web users implies the German regulator is uneasy about the idea of imposing what might be viewed as a \u201cclassic\u201d competition remedy to address the imbalance it\u2019s identified around data access \u2014 say by boosting less dominant players\u2019 visibility of web users info, such as by requiring Alphabet to share first-party data with rivals so they\u2019re not at such a disadvantage versus its high dimension view (a step that would of course mean even more surveillance and even less privacy for web users).<\/p>\n The FCO\u2019s review of programmatic advertising is also notable in calling out insufficient transparency for web users whose information is subject to ad surveillance:<\/p>\n The situation is also intransparent from the users\u2019 perspective. Their data form the most important basis for programmatic advertising. However, it is hardly possible for users to assess what happens to their data, who receives them and how they are used. Several legal policy proposals have been made for restricting data collection and the use of data for advertising purposes. The Bundeskartellamt<\/em> [FCO] has looked into this issue from a competition law perspective.<\/p>\n<\/blockquote>\n A line in the executive summary<\/a> of the report goes on to posit that \u201cfrom a competition point of view consideration can thus be given to the question as to whether, overall, it would seem advisable to move away from such a system of data-driven advertising\u201d \u2014 on account of what the FCO finds to be systemic complexity, opacity and privacy hostility in the programmatic ad market (which it also points out hinges upon \u201chighly detailed personal profiles [being] created, which include highly sensitive information, solely for the purpose of facilitating advertising\u201d).<\/p>\n This nuanced view of a situation where competition and privacy might \u2014 through an overly simplistic lens \u2014 be perceived as being in tension (i.e., if greater privacy for users results in greater market power for the handful of giants that have amassed tons of first-party data) is not so surprising when you consider the FCO\u2019s pioneering case against Facebook\u2019s \u201csuperprofiling,\u201d where the regulator has taken the view that the social network\u2019s exploitative abuse of privacy is an antitrust abuse too. (That case is subject to a referral to the EU\u2019s top court<\/a> where a ruling remains pending.)<\/p>\n The FCO has also been investigating Google\u2019s terms and conditions for processing user data since May 2021<\/a> \u2014 when it announced it would look into whether the adtech giant gives users sufficient choice over data processing or makes use of its services conditional on users agreeing to its processing of their information.<\/p>\n Earlier this year \u2014 in January<\/a> \u2014 it issued a preliminary statement of objections on Google after finding it does not offer users sufficient choice. It also said it enjoys a strategic advantage over other ad businesses due to \u201cestablished access to relevant data gathered from a large number of different services\u201d \u2014 signaling it intends to require Google to offer users more choice over its processing.<\/p>\n Final enforcement of that case is still pending but the FCO\u2019s review of the programmatic ad industry seems likely to bolster its preliminary take that Google dominates off the back of an unfair data advantage \u2014 and may lead it on to a conclusion that fixing that component might be the least harmful way to go about rebalancing a competitively skewed ad market that\u2019s simultaneously and systematically exploiting consumer privacy.<\/p>\n What the FCO\u2019s perspective on the programmatic ad industry\u2019s problems might mean for other market interventions remains to be seen. But it writes of the insights gleaned from the sectoral inquiry: \u201cThere will be a particular focus on the large digital companies which play a key role in the online advertising sector.\u201d<\/p>\n It also specifies that its review of the programmatic ad sector will inform \u201ccurrent and future proceedings\u201d \u2014 which is relevant to the aforementioned Google\/Alphabet data processing probe; and also to an open investigation of Apple\u2019s app privacy framework (the latter has been accused by the ad industry of being anti-competitive yet clearly aligns with user privacy since it empowers iOS users to deny tracking requests from third party apps which Apple mandates must ask users if they want to be tracked).<\/p>\n Applying specific measures on Apple that demand it applies the same up-front request standard to its own tracking of iOS users might be one way to smooth competition concerns raised over its App Tracking Transparency without having to row back on privacy protections the feature delivers for users.<\/p>\n In Germany, both Google\/Alphabet<\/a> and Apple<\/a> have been subject to a special abuse control regime since the FCO confirmed (in January 2022; and April 2023 respectively) they meet the requirement of having paramount significance across digital markets. This designation allows the competition regulator to intervene proactively on their businesses when it suspects anti-competitive behavior, rather than having to first investigate and establish a breach before being able to intervene.<\/p>\n Returning to the tangled issue of tracking, it\u2019s also notable that the German antitrust regulator is zooming out for a big picture view: Its remarks highlight wider digital policy proposals that are bringing in new limits on use of data for tracking ads, such as the EU\u2019s incoming Digital Markets Act<\/a> and Digital Services Act<\/a> \u2014 which suggests it\u2019s holding out hope for regionally rebooted (joint) digital enforcement to achieve structural reform of the surveillance ad industry.<\/p>\n So far, no single regulator \u2014 of any stripe \u2014 has been able to unpick the tangled issue of tracking and its systemic toxicity. But maybe, just maybe, joint working that chips away at the industrial data complex from multiple angles will finally turn the tanker in a way that works for a competition agenda and web users too.<\/p>\n<\/p><\/div>\n <\/br><\/br><\/br><\/p>\n
\nGermany\u2019s antitrust watchdog questions the future of behavioral advertising<\/br>
\n2023-06-01 21:49:08<\/br><\/p>\n\n
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