The Australian Competition and Consumer Commission (ACCC) recently published its final report on the supply of ad tech services and ad agency services. In short, the ACCC identified that the current Australian competition law regime is not well equipped to appropriately manage the supply of ad tech services.
Amongst its findings, the ACCC focused on Google and its position in the wider digital landscape. Due to its establishment in the industry, Google was identified as being in a dominant position when relaying ads online, with more than 90 per cent of ads passing through at least one Google service. This dominance in the ad supply chain is due to the culmination of its access to consumers and their data, access to exclusive inventory, and integration between its services across the ad supply chain. Late last year, we saw Google face regulator pressure for these exact reasons in the form of the News Media Bargaining Code. Now the ACCC is finding that Google has positioned itself so well that it can prioritise its own ad content and even prevent competitors from posting on YouTube (which Google owns). This is primarily due to Google’s vertical integration, where it controls nearly every aspect of the ad supply chain process. More importantly, this means that in certain situations Google can act for both the advertiser and the publisher, potentially creating a conflict of interest and damaging competition in the ad tech sphere.
The report also focused on the impact of the control of the ad supply chain on consumers. It was found that at least 27 per cent of Australian businesses spend money on advertisements online to reach consumers. If Google has the power to dampen competition and control the output of ads, prices for ads will likely go up which will ultimately result in consumers bearing higher fees for advertised goods and services. Additionally, Google harvests a substantial amount of first-party data through its services such as Maps, YouTube, and Search, and it is unclear how this is being used to target Australian consumers.
The ACCC is recommending that new rules need to be introduced to “manage conflicts of interest, prevent anti-competitive self-preferencing, and ensure rival ad tech providers can compete on their merits.” Moreover, transparency reporting and updated terms of use should be implemented to easily communicate to consumers about what data is being collected and how it will be used in advertising.
For the full reading of the report, see here.