The Australian Competition and Consumer Commission (ACCC) in a recently published final report on an inquiry examining competition concerns in the digital advertising sector, has called for legal powers to curb the dominance of tech giant Google in the advertising technology sector. In the report, the Australian regulator reached a decision to enact new “regulatory solutions” aimed at addressing Google’s dominance in the advertising technology sector.
Google’s access to first-party data was a particular focus in the report, with the Australian regulator advocating for special measures to tackle Google’s dominance; such as data separation powers or data access requirements. “We have identified systemic competition concerns relating to conduct over many years and multiple ad tech services, including conduct that harms rivals. Investigation and enforcement proceedings under general competition laws are not well suited to deal with these sorts of broad concerns, and can take too long if anticompetitive harm is to be prevented,” Chairman of the Australian Competition and Consumer Commission, Rod Sims, said in a statement. He added that the commission was concerned that the lack of competition has likely led to higher ad tech fees, which was bad for publishers, advertisers, and consumers alike.
According to the Commission, Google was guilty of self-referencing, and of shielding its services from the competition. The watchdog gave the example of how Google prevents rival ad tech services from accessing ads on YouTube, which it said gives Google’s ad tech services an undue advantage. In addition, Google was found to have a dominant position in key parts of the ad tech supply chain. An estimate showed that more than 90 percent of ad impressions traded via the ad tech supply chain passed through at least one Google service last year. The report also highlighted key acquisitions by Google — including DoubleClick in 2007, AdMob in 2009, and YouTube in 2006, which the regulator said had helped Google entrench its position in ad tech.
In addition to pushing for legal powers to curb Google’s dominance in the advertising sector, the Australian Competition and Consumer Commission recommended that the industry establishes standards that would require providers to publish average fees and take rates to enable their customers to easily compare fees across different providers and services. And which would also enable “full and independent verification of the services advertisers use in the supply chain”.
Google was also alleged of using its dominance to operate its ad tech services in a way that has, over time, diminished the competition in the ad tech industry. “This conduct has helped Google to establish and entrench its dominant position in the ad tech supply chain,” said Rod Sims. To counteract this, the Commission is pushing for the creation of rules to manage conflicts of interest; prevent anti-competitive self-preferencing, and ensure that rival ad tech providers “can compete on their merits.” This, it said, would tackle the dominance of Google, and would benefit businesses and customers.
Responding to the ACCC’s report, a Google spokesperson said, on the contrary, that Google’s digital advertising technology services were “delivering benefits for businesses and consumers, helping publishers fund their content, enabling small businesses to reach customers and grow, and protecting people online from bad ad practices,” –a highly expected response, right?
In the past months, Google has been in similar situations with regulators around the globe, and for the same reason –its global market dominance. Most recently, Google launched a bid to get Europe’s second-highest court to annul a fine of $5.1 billion (4.34 billion euros) imposed by European regulators in 2018. According to the European Commission, Google had used its Android operating system since 2011 to rein rivals in and solidify its dominance in the internet search space.