Yahoo Finance MP calls for probe into Facebook advertising business
The chair of the Digital Culture Media and Sport (DCMS) Committee has called on the UK’s competition watchdog to investigate Facebook amid claims that the company misled advertisers.
Damian Collins, who led the parliamentary inquiry into fake news last year, said that the Competition and Markets Authority (CMA) should launch a new probe into Facebook and the issue of advertising on social media sites.
His call for action came hours after Facebook was accused of fraud by a group of advertisers in the US, who said that it had knowingly inflated viewing figures for its videos. Facebook said that the claim was without merit and has filed a motion to dismiss the legal action.
Mr Collins argued that advertisers rely on “opaque” data given by Facebook to target users that may not exist, and that the investigation in America gives "cause for concern”.
“If the number of fake accounts is much larger than they say, yet they are selling them as average users accounts, then they are misleading advertisers,” he told the Daily Telegraph.
“Facebook estimated that the number of fake accounts on the site was around 3-4pc. We know in the previous 6 months they blocked or removed one million accounts. This suggests that the scale of fake accounts is much larger.”
Yet more allegations regarding Facebook's opaque advertising system. Regulators such as the CMA should consider investigating the operation of the advertising market on social media platforms such as Facebook https://t.co/lYHad6MlOZ
— Damian Collins (@DamianCollins) October 18, 2018
The CMA declined to comment on whether it plans to launch an investigation into Facebook, however further scrutiny into wider digital advertising practices is likely.
Earlier this year, CMA chief executive Dr Andrea Coscelli told the House of Lords Communications Committee that he was “actively considering” a joint effort with Ofcom “subject to Brexit in the next few weeks”.
Some publishers that heavily invested in video advertising struggled to translate videos into a profitable business model, because of the high cost of making bespoke native ads. Yet the demand for video content is growing. The Interactive Advertising Bureau earlier this month reported a 40pc growth in demand for video advertising, which is now worth £976m.
