Adverse effects from the oligopoly that Google and other tech giants have on data have extended into internet advertising, a final report released online by the Japan Fair Trade Commission has concluded.
IT giants are using personal information collected during internet searches and through membership-based social networking services to deliver ads, and are reaping huge profits in the process. Yet the personal information of internet users is not being taken seriously, and unfavorable terms have been pressed upon advertisers and other parties.
The Fair Trade Commission's report pointed out that use of personal data in advertising with only a vague explanation about how it will be used could constitute abuse of a dominant bargaining position, which is prohibited under the Anti-Monopoly Act.
There is also a possibility that tech giants could be violating the law in their dealings with advertisers and other parties by pressuring them to accept unilateral changes to trade agreements. Meanwhile, vagueness surrounding the cost of running ads and the standards for calculating the effectiveness of ads has been cast as a problem, on the grounds that it could warp fair competition.
Google boasts roughly an 80% share of the internet search business, and it is also involved in ad mediation and delivery systems with its video sharing site YouTube. If clients who stand in a weak position do not comply with its demands, then they could effectively be shut out of the internet advertising market.
The more hits a website has, the higher its value is, and the higher the cost of advertising. But if shocking information and fake news become rampant so sites can get more clicks, it is feared that consumers will become unable to obtain accurate information.
This month, a new law in Japan urging transparency and fairness in internet shopping and other such transactions came into effect. The government intends to add regulations to the field of internet advertising in the future.
Japan's internet advertising market topped 2 trillion yen (over $18.96 billion) in 2019, surpassing the market for TV ads. Measures are needed to put the brakes on the current situation in which people's personal information is being rampantly used in the advertising business without their knowledge.
Ads have value when they contain information that is useful to consumers. Tech giants must reform from their bottom-line ideology and make an effort to restore soundness to internet advertising.