ACCC accuses Google of anti-competitive practices in Australia
The Australian Competition & Consumer Commission (ACCC) has accused Google of preventing rival ad tech services from accessing ads on YouTube, giving its ad tech services an important advantage.
It found that Google has access to a large volume and range of first-party data gathered through its customer-facing services
According to the “Digital advertising services inquiry - final report”, the ACCC also found Google has refused to participate in publisher-led header bidding, an industry innovation aimed at increasing competition for publishers’ inventory, and previously allowed its services to have a ‘last look’ opportunity to outbid rivals.
“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. This conduct has helped Google to establish and entrench its dominant position in the ad tech supply chain,” said Ron Sims, the chair of the ACCC.
“Google’s activities across the supply chain also mean that, in a single transaction, Google can act on behalf of both the advertiser (the buyer) and the publisher (the seller) and operate the ad exchange connecting these two parties. As the interests of these parties do not align, this creates conflicts of interest for Google which can harm both advertisers and publishers.”
The report is part of the ongoing digital platforms inquiry into Facebook and Google in Australia, which began in 2018.
What did the report find?
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The report estimates that, in Australia, at least 27% of advertiser spend on ads sold via the ad tech supply chain was retained by ad tech providers in 2020.
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It found that Google has access to a large volume and range of first-party data gathered through its customer-facing services, such as Search, Maps, and YouTube. The extent to which Google uses its first-party data to advantage its ad tech businesses is not clear and is a source of confusion among industry stakeholders.
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The report recommends that under the proposed new sector-specific rules, the ACCC be given the power to develop and implement special measures to address competition issues caused by an ad tech provider’s data advantage, such as data separation or data access requirements to address the competition risks that may arise from the use of first-party data.
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The ACCC also found that the pricing and the operation of ad tech services lack transparency. The complexity of the supply chain contributes to this lack of transparency and can make it difficult for advertisers and publishers to understand how the supply chain is operating and detect misconduct.
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It recommends the industry establish standards, requiring ad tech providers to publish average fees and take rates to enable ad tech customers to easily compare fees and take rates across different ad tech providers and services. It also recommends an industry standard to enable full and independent verification of the services advertisers use in the supply chain.
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The report also identified specific transparency issues with Google’s publisher services and recommends that Google should be required to provide publishers with information about the operation and outcomes of its publisher ad server auctions.
What happens next?
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The recommendations in this report should be given effect, including the legal framework for the proposed rules and powers will be considered as part of a broader ACCC report due in September 2022.
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That report will also look at whether the proposed rules for ad tech need to form part of a broader regulatory scheme to address common competition and consumer concerns we have identified in digital platform markets.
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Consultation on that report will commence in the first quarter of 2022 and will take into account overseas legislative proposals to deal with these issues.