ACCC claims Google's dominance in ad tech harms businesses, consumers

ACCC claims Google's dominance in ad tech harms businesses, consumers

The Australian Competition and Consumer Commission (ACCC) has called for greater powers in the advertising technology sector after an inquiry found Google’s domination in the market is likely to be harming businesses and consumers.

Published today, the Digital advertising services inquiry found more than “90 per cent of ad impressions” online were passing through at least one Google service last year.

The ACCC has concluded enforcement action under Australia’s existing competition laws alone would not be enough to address competition issues in the sector, and believes it needs to be given powers to develop specific rules in response.

“Google has used its vertically integrated position to operate its ad tech services in a way that has, over time, led to a less competitive ad tech industry,” ACCC chair Rod Sims said.

“This conduct has helped Google to establish and entrench its dominant position in the ad tech supply chain.”

The inquiry estimates at least 27 per cent of advertiser spend on ads sold via the ad tech supply chain was retained by ad tech providers in 2020, leading to concerns that lack of competition will increase fees.

Sims said the ACCC was considering specific allegations against Google under existing competition laws, emphasising new regulatory solutions were needed to address the tech giant’s dominance and restore competition to the sector.

In the report, six recommendations were outlined, with the first calling on Google to provide greater transparency about how it uses first-party data to provide ad tech services.

Moreover, the ACCC is looking for the US-based company to provide publishers with additional information about the operation and outcomes of its publisher ad server auctions.

The watchdog is also recommending it receives the powers to develop, establish and enforce sector rules that address conflicts of interest and competition issues in the ad tech supply chain.

Implementing industry standards were also put forward, which would require ad tech providers to publish average fees and take rates for ad tech services, and to enable full, independent verification of demand side platform services.

“Many of the concerns we identified in the ad tech supply chain are similar to concerns in other digital platform markets, such as online search, social media and app marketplaces,” said Sims.

“These markets are also dominated by one or two key providers, which benefit from vertical integration, leading to significant competition concerns. In many cases these are compounded by a lack of transparency.”

This is not the first time Google has landed in hot water with the ACCC, as the watchdog alleged it misled consumers about personal location data collected through Android mobile devices earlier this year.  

The report will look at whether the proposed rules for ad tech need to form part of a broader regulatory scheme.

Consultation on the report will commence in the first quarter of 2022 and will look at overseas legislative proposals to tackle the issue.

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