Online Platforms and Digital Advertising Market Study: Observations on the Statement of Scope

Abstract

I appreciate the opportunity to submit observations on the Statement of Scope (“SOS”) of the Market Study on “Online Platforms and Digital Advertising”. This Market Study is welcome given the importance of digital advertising for online content providers (which I will refer to as “publishers”), as well as the complexity and opacity of digital advertising markets. My research reveals that these markets do not function properly. They are ridden with conflicts of interest, leveraging practices, and their lack of competitiveness allows online platforms to generate supra-competitive rents to the detriment of advertisers, publishers and, ultimately, consumers. Investment in ad tech (i.e., the technologies developed and used by intermediaries between advertisers and publishers) has considerably declined.

My observations are based on several recent research papers I have authored or co-authored on digital advertising, with a focus on online display advertising, and on the competitive relationship between online platforms and news publishers. They are also informed by earlier papers I wrote on two-sided markets, intermediation platforms, big data, and business models based on the offering of “free” services, which are monetized by selling advertising. The law and economics of online platforms has been one of my main areas of focus in the past decade.