By: Oles Andriychuk (Oxford Business Law Blog)
The current structure of digital advertising markets makes the Google-Facebook duopoly an unavoidable trading partner for every party in the content consumption supply chain, creating a typical ‘bottleneck’ problem. The media industry remains the only meaningful market force potentially capable of mitigating the duopolistic order of digital advertising, but traditional media appear to be more interested in partnering with Big Tech than competing with it.
The digital advertising industry shows a remarkable trajectory of growth, both in terms of scaling up as well as technological advancement. Being an omnipotent and omnipresent intermediary between the end-users and their digital life allows a handful of digital champions to hold a unique market position, improving endlessly their algorithmic matching expertise. Extraordinarily, out of all market players active in display advertising in the UK, Facebook generated over 50 percent of revenues. Google alone generated over 90 percent of UK search advertising revenues.
It is a matter of fact that the entire digital advertising supply chain is being dominated by Facebook’s and Google’s expanding duopoly. This dominance is not only about the scope of their presence in the market, and not only about the astonishing absolute figures of their revenues and profits.
These are the consequences. An important trigger of this radical metamorphosis in the area of online advertising was a fundamental reconfiguration of the entire ‘production process’—the path from the advertiser to the consumer has become much more technologically advanced. The entire process is currently characterized by tailoring and individualization and underpinned by robust algorithmic matching techniques. This allows myriad individual transactions to take place automatically within milliseconds—and despite some quite astonishing revelations and allegations of horizontal collusion and vertical exploitation, the system is incomparably more affordable than traditional advertising. Micro-targeting and consumer profiling allow a very effective matching of advertisers, publishers, and end-users. Clearly, the technological robustness of the model is accompanied by the objective features of the digital markets, which are characterized by strong network effects and oligopolistic structure, and which until recently have been evolving without any systemic regulatory supervision and enforcement. In antitrust circles, this is now a well-known story…
Featured News
Subscribers Defend $4.7 Billion Antitrust Verdict Against NFL in Court Filings
Jul 19, 2024 by
CPI
Von der Leyen Calls for Competition Policy to Boost EU Companies’ Growth
Jul 19, 2024 by
CPI
Vermont AG Sues Pharmacy Benefit Managers Over Drug Prices
Jul 18, 2024 by
CPI
Australians Face Increased Stamp Prices Following ACCC Approval
Jul 18, 2024 by
CPI
Live Nation Seeks Dismissal of DOJ Antitrust Allegations
Jul 18, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Private Equity Roll-Up Schemes
Jun 28, 2024 by
CPI
The FTC’s Focus on Private Equity is Warranted
Jun 28, 2024 by
CPI
Unraveling the Roll-Up: Private Equity’s Misunderstood Investment Strategy
Jun 28, 2024 by
CPI
Antitrust Focus on Private Equity Funds and Serial Acquisitions
Jun 28, 2024 by
CPI
Private Equity Roll-Ups Amidst Heightened Antitrust Enforcement
Jun 28, 2024 by
CPI