THE competition watchdog has launched an inquiry into digital online platforms like Facebook and Google to “lift the lid” on how they collect and use personal data.

The Competition and Markets Authority (CMA) study, ordered by chancellor Philip Hammond in March and part of a wider digital markets strategy, will consider the monopoly power of the firms, the way they collect and use data and whether there is enough competition in the digital advertising market.

The CMA will make detailed recommendations to Government if its probe uncovers evidence of any problems within the digital market.

An independent review earlier this year by former Obama adviser Jason Furman raised concerns about the dominance of tech giants and said the market suffered from a lack of transparency.

CMA chairman Andrew Tyrie said: “It is our job to ensure that companies innovate and compete. And every bit as much, it’s our job to ensure that consumers are protected from detriment.

“We will be advising Government on how aspects of Furman can most effectively be implemented.

“Much about these fast-changing markets is a closed book to most people. The work we do will open them up to greater scrutiny.”

The probe comes amid concerns over Google and Facebook’s dominance over the £14 billion digital advertising market.

In his report commission by the Chancellor, Furman – Barack Obama’s former chief economist – recommends a competition unit is created and backed up with legal powers to help users maintain more control over their data online and be able to easily switch between platforms and services.

It also urges the creation of a code of conduct and the strengthening of regulatory powers.

The review recommends changes to merger rules so that the CMA is better equipped to stop mergers that are considered likely to damage future competition or consumer choice.