Another report shows the GDPR benefited Google and Facebook, and hurt everyone else
from the it’s-not-like-we-didn’t-warn-you dept
We warned folks that these big attempts to “regulate” the internet as a way to “punish” Google and Facebook would only help those companies. Last fall, about six months into the GDPR, we noted that there appeared to be one big winner from the law: Google. And now, the Wall Street Journal notes that it’s increasingly looking like Facebook and Google have grown thanks to the GDPR, while the competition has been wiped out.
“GDPR has tended to hand power to the big platforms because they have the ability to collect and process the data,” says Mark Read, CEO of advertising giant WPP PLC. It has “entrenched the interests of the incumbent, and made it harder for smaller ad-tech companies, who ironically tend to be European.”
So, great work, EU. In your hatred for the big US internet companies, you handed them the market, while destroying the local European companies.
In 2018, both appeared to have outgrown the digital advertising market in the region, according to a comparison of company filings with regional estimates, suggesting they continued to gain share. Facebook’s revenue from ads shown in Europe rose 40% in 2018. Google’s revenue in Europe, the Middle East and Africa—the vast majority of which comes from advertising—rose 20% last year.
By comparison, Europe’s digital advertising market grew by only 14% over the same period, according to estimates from IAB Europe, an online-ad trade group.
As the article itself notes, for advertisers, the GDPR has driven them directly into the hands of the biggest internet players, because they know that those companies can handle the compliance costs, while no one else can:
L’Oréal SA’s chief digital officer, Lubomira Rochet, says the cosmetics company has decided to focus its ad spending on Google, Facebook and Amazon.com Inc. because “those guys have the capabilities to really treat the data in the way that it should be treated.”
Now, most people might find it laughable to claim that Facebook and Google are treating data “the way it should be treated,” but from an advertiser’s standpoint, you can totally see where they’re coming from.
Of course, when we suggested this is how things would play out, people yelled at us that if this were true, why were those companies pushing back on the regulations, and the answer to that is pretty straightforward. The compliance costs are still massive, and it has been costly to deal with the GDPR. But, it’s been costlier for the smaller players who can’t take it. So we end up reducing competition, and making it that much more difficult for competitive entrants and upstarts to take on these giants. That doesn’t seem like a good trade-off.