A New Digital Social Contract to Encourage Internet Competition

Ghosh, Dipayan
Competition Policy International

Over the past year, the common conception that the lion’s share of the digital advertising market
would securely remain the dominion of Facebook and Google for the foreseeable future was
turned on its head with the emergence of an entirely new player: Amazon. The company’s
emergence in digital advertising has raised the idea that it might present a major challenge to the
market power that Facebook and Google have developed in the sector over the past many years.2
The numbers seem to illustrate this dynamic: Whereas Amazon’s market presence totaled
around 6.8 percent a year ago, its share has grown to an estimated 8.8 percent this year, and is
expected to increase to 10 percent as the other firms gradually drop.
3 As some experts have noted,
this precipitous jump – which affirms Amazon as third in the rankings of internet firms that
participate in the digital advertising market – does not appear to have been induced by an artificial
blip or an accounting update; rather, it represents a concerted strategy by the firm to engage the
digital advertising ecosystem and make itself a major playerin that sector to generate high-margin
profits into the future. Reports meanwhile suggest that Facebook and Google, which enjoy a
collective share totaling nearly 60 percent, are becoming increasingly worried as Amazon’s
position in the market climbs.