There are concerns about the oligopolization of giant information technology companies in the fast-growing digital advertising market. The creation of rules to protect trade partners and users must be accelerated.
The government's Conference for Digital Market Competition has compiled an interim report on the regulation of digital advertising on the internet. It plans to submit a final report by as early as the end of this year, and embark on the development of related laws and systems to promote the transparency of trade.
IT firms' search sites and social media, among other services, are now indispensable infrastructure for consumers.
Before all else, it is important for each company to realize its grave social responsibility and make efforts to develop the market soundly.
The size of the digital advertising market, which is a major source of earnings for IT firms, surpassed 2 trillion yen in 2019, exceeding the television advertising market for the first time.
In the digital advertising market, U.S. firms Google LLC and Facebook, Inc. have overwhelming power. Adverse effects caused by such an oligopoly cannot be overlooked.
Google has a nearly 80% market share in searches, collecting prodigious amounts of information such as users' age, gender and browsing history. Facebook ascertains users' preferences from their social media data.
Based on these factors, they deliver targeted advertisements to individuals.
It is troubling that their way of deciding on charges and displaying ads is complicated and difficult to understand, as if enveloped in a black box.
IT companies have not disclosed their charges for running an advertisement. There are cases where it is not known on which of an endless number of sites and when the advertisements will appear.
Reportedly, there is an example of a firm prioritizing advertisements on a services site it operated to earn more revenue.
In a survey by the Fair Trade Commission, around half of advertisers said they "are dissatisfied [with IT firms such as Google] about the information disclosed."
It is indispensable to provide more transparency and do away with unfair dealings. The government needs to call on IT companies to clarify fees, the way prices are decided and other information, and to consider a mechanism in which a third party checks the number of ad displays, and other methods.
It is hoped the protection of consumers, including how personal information is handled, will be ensured.
According to a survey of the Consumer Affairs Agency, the number of respondents who answered that targeted ads are "annoying" reached about 70%.
In another survey, about 40% of people did not recognize that their information was collected by firms through internet services. This is probably because it is difficult to understand companies' explanations, even though users have consented to rules and regulations.
A monitoring framework in which IT firms carefully inform users of their data collection and the ways the data are used should be established. By changing initial settings of targeted advertisement displays, it is desirable to consider a way to deliver them to only those who want to receive them.
-- The original Japanese article appeared in The Yomiuri Shimbun on June 24, 2020.
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