The UK Competition and Markets Authority (CMA) has launched a wide-reaching investigation into the power that big tech firms such as Google and Facebook hold in the digital advertising sector.

It hopes to reveal the sources of any market power, the way that digital advertisers collect and use personal data, and whether competition in digital advertising is producing good outcomes for consumers.

It will examine whether people have the skills, knowledge and control over how information about them is collected and used, so they can decide whether or not to share it in the first place.

The government said that as well as consumer protection, the investigation also hopes to reveal if a monopoly on personal information is making it harder for rival tech companies to compete for business.

The investigation forms part of a wider digital markets strategy from the government, which has called for greater regulation in the space.

CMA chairman Andrew Tyrie said that the inherently global nature of digital advertising will require it to work closely with international authorities.

“Much about these fast-changing markets is a closed book to most people. The work we do will open them up to greater scrutiny, and should give Parliament and the public a better grip on what global online platforms are doing,” he added.

If it finds evidence that there are problems as part of the report, the Conduct and Markets Authority will make detailed recommendations to government which could lead to stricter regulation in the UK digital advertising sector.

"The market study will help us further lift the lid on how major online platforms work, especially how they collect and use personal data, how they monetise their content through digital advertising, and what this means for competition,” said CMA Chief Executive Andrea Coscelli.

“The findings from this work will be used to influence the direction of policy and regulation in the digital sector.”

The market study is expected before July 2nd 2020.