The Competition Authority announced that the preliminary report phase has been completed within the scope of the ‘Online Advertising Industry Review’, which it started on January 21, 2021 to identify behavioral and structural competition problems in the industry by closely following the current national and international developments in the field of online advertising.

Emphasizing that advertising services are turning to online channels, the report included the following:

As a matter of fact, as of 2021, online advertising surpassed television advertising to become the medium with the highest share of advertising expenditures. The shift of advertising services to online channels has led to some changes in the functioning of the supply chain and competitive parameters. As a result of all these developments, it became necessary to analyze the dynamics in the sector, to identify behavioral and/or structural competition problems in the sector and to develop solutions for these problems in order to implement competition law effectively and accurately in these markets. For the aforementioned reasons, an investigation has been initiated regarding the said sector.

Google and Meta scrutinized

In the report, it was stated that the display advertising market has a structure concentrated in Meta, and the search-based advertising market in the eyes of Google’s economic integrity, as follows:

“Secondly, online advertising technology services used to buy and sell display ads, which allow the use of complex algorithms and systems to trade digital ads in milliseconds, thereby enabling the sale of digital ad spaces to large numbers of advertisers on multiple publishers’ websites/apps, were examined. In this context, it has been understood that Google has a high market share in all the services it offers in the advertising technology supply chain and that it is active by offering multiple products in each category of advertising technology services, increasing the concentration in the market.

“Data collection raises privacy concerns”

Noting that the transformation of user data collected by enterprises into services through targeted advertising provides significant benefits for each stakeholder, including publishers, advertisers and consumers. “Data collection has also been seen to cause privacy concerns among consumers.‘ it was said.

“It was seen that there was a problem of transparency”

In the report, it is stated that the competition problems that arise as a result of the practices of the undertakings that are considered to have market power in the sector and the solution proposals for these problems are investigated.“In this context, it has been found that concerns about tethering, self-biasing and data aggregation practices of high market power platforms can affect the level of competitiveness in the online advertising industry, a significant transparency issue in the ad technology supply chain.” it was said.

In the report, it was pointed out that there is a serious information asymmetry problem against advertisers and publishers in the sector. “This problem has been found to be particularly prevalent in the pricing of ad technology services and metering of ads. It has also been found that the complexity of the bidding processes has also made advertisers and publishers dependent on ad technology providers to buy and sell took place.

“It is of great importance to implement the right competition policies”

Considering the complex functioning and multilateral market structure of the online advertising sector, the report emphasizes the importance of ensuring the continuity of competition in the said sector and applying the right competition policies.

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