GOOGLE and Facebook are set to be policed under a new technology regulator after a report found their dominance in digital advertising could drive up prices for consumers.

The government is expected to create the new regulator, which will have enforcement powers, next year.

The plan comes as a new report from watchdogs said there is a “strong argument” for the development of a new regulatory regime.

The verdict from the Competition and Markets Authority (CMA) is part of a study into online platforms and digital advertising ahead of government intervention in the sector.

Its other findings include that Google and “dominance” in digital advertising risks driving up prices for flights, electronics and insurance.

The CMA fears the tech giants’ large market share could allow them to increase advertising prices, which could be passed on to consumers buying online.

The watchdog is also concerned that the pair’s power is making it impossible for rivals to compete on “equal terms”, as well as squeezing newspapers and other publishers, jeopardising their ability to produce content.

Its interim report – called “CMA lifts the lid on digital giants” – has now gone out to consultation ahead of a full report later in 2020.

Chief executive Andrea Coscelli said: “At the end of the study, we’ll present our findings to the new Government as they decide whether and how to regulate what is an increasingly central sector in all our lives.”

This could include rules governing the behaviour of online platforms and giving people greater control over their own data.

Both Google and Facebook said they would work with the CMA.

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