Explained: The ACCC’s Latest Plan To Control Google & Its Ad Tech Dominance

Seattle, USA - Oct 15, 2019: The entrance sign to the new Google building in the south lake union area at sunset.
SHARE
THIS



Australia’s competition watchdog wants more power to control Google and its dominance over the advertising technology space.

Today the ACCC has released the long-awaited Digital advertising services inquiry – final report, which comes more than 18 months after the Australian government initiated the inquiry.

As was expected, the report looks closely at the dominance of Google, estimating more than 90 per cent of ad impressions traded via the ad tech supply chain went through the tech giant’s ecosystem in 2020.

The ACCC also suggests that Google’s vertical integration across the ad tech supply chain has resulted in self-preferencing behaviour.

Specifically, Google’s decision to direct demand from its DSPs (particularly Google Ads) to its SSP and restrict how its SSP works with third-party providers are considered self-preferencing behaviours by the ACCC.

“The ACCC considers that over time, this conduct has had the cumulative effect of lessening competition for the supply of ad tech services, and allowed Google to establish and entrench its dominant position in the ad tech supply chain,” the report says.

The ACCC goes as far as to suggest such behaviour is contrary to the Competition and Consumer Act 2010 (CCA).

“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,” ACCC Chair Rod Sims said.

“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.”

Supply chain concerns

Much like the PwC/ISBA report that came out of the UK last year, the latest ACCC report looks to calculate how much advertising spend ends up in the hands of publishers after ad tech fees.

While PwC/ISBA calculated this figure to be 51 per cent, the ACCC estimates publishers receive 72.9 per cent of advertiser expenditure, with 27 per cent going towards ad tech fees.

“The ACCC considers that these fee levels are higher than they would be if the supply of ad tech services was more competitive, and likely reflect the market power that Google is able to exercise in its dealings with both advertisers and publishers,” the report says.

“High levels of ad tech fees reduce the revenue publishers obtain for their advertising inventory and therefore the funds available to invest in the online content they make available to consumers.”

Calls for stronger controls

To better control Google’s dominance, the ACCC has recommended it be given powers to develop sector specific rules to address conflicts of interest and competition issues in the ad tech supply chain.

These rules should give the ACCC the ability to manage conflicts of interest, prevent anti-competitive self-preferencing, ensure rivals can compete on their merits by having nondiscriminatory access to certain services, and address transparency concerns, the competition watchdog said.

It is also recommended these sector-specific rules give the ACCC the ability to implement measures to address an ad tech provider’s data advantage.

“Sector-specific regulation, such as that proposed in this report, is not new. Other industries, such as telecommunications, have specific rules which can address particular competition and transparency concerns identified in those sectors,” the ACCC said in a press release.

The ACCC also points to Google’s customer-facing services such as Search, Maps and YouTube and the first-party data such services generate for the tech giant.

The competition watchdog is calling on Google to provide more transparency as to how this data is used.

“We recommend that Google makes clear how it uses its data through clear public statements in its terms and conditions and other material it uses to sell its services,” Sims said.

B&T has contacted Google for comment.

 

Please login with linkedin to comment

ACCC Ad tech Google

Latest News

Tinkerbell Is Putting Vegemite On Pizza
  • Marketing

Tinkerbell Is Putting Vegemite On Pizza

Over the years, VEGEMITE has been largely misunderstood across the globe, with Aussies often having to defend the spread and detail exactly “how to” best enjoy the stuff. But as it turns out, Australians have been getting it wrong this whole time! VEGEMITE and Thinkerbell ventured to food mecca New York to recruit Brooklyn Master […]

Subway Makes Return To High Seas With ‘Sink A Sub’ Battleship Game
  • Campaigns

Subway Makes Return To High Seas With ‘Sink A Sub’ Battleship Game

Subway has this week, officially launched its digital game Sink A Sub, with the first $10,000 prize already being awarded to a lucky recipient in Queensland. Subway’s Sink A Sub game is a user-friendly experience based on the infamous naval war board game Battleship. It was successfully launched for the first time in 2020 as […]

NITV Appoints Peter Noble To General Manager
  • Media

NITV Appoints Peter Noble To General Manager

National Indigenous Television (NITV) has announced the appointment of Peter Noble as general manager, to support the continued growth and evolution of the channel dedicated to First Nations voices and perspectives. Noble (pictured) a proud Girramay and Bandjin man, joins NITV with more than 20 years’ experience in the media industry, working across content disciplines […]

Queen Of Aussie Pop Culture Abbie Chatfield Signs Podcast Deal With LiSTNR
  • Media

Queen Of Aussie Pop Culture Abbie Chatfield Signs Podcast Deal With LiSTNR

Reality TV star, influencer and unabashed over-sharer Abbie Chatfield has signed with SCA to bring her hugely popular and fiercely candid podcast, It’s A Lot to Australia’s biggest audio content creator –  LiSTNR. Chatfield’s never been afraid to call out bad behaviour or tell it like it is. And that’s just what people love about […]

Sydney Headshots; Daniel Sommer Photography; Sydney Headshot Photographer; Daniel Sommer
  • Marketing

Cheetah Digital Announces Major CM Group Merger

CM Group, a portfolio of martech companies focused on multichannel digital marketing, today announced its merger with Cheetah Digital under the CM Group name. The merger expands and enhances both CM Group’s and Cheetah Digital’s ability to deliver innovative email, omnichannel, personalization, and loyalty solutions. The combined company will own a broad array of technologies […]

Smart Accelerates CTV Growth Ambitions Via Publica Partnership
  • Advertising
  • Technology

Smart Accelerates CTV Growth Ambitions Via Publica Partnership

Independent ad tech platform Smart has announced a new partnership with connected TV (CTV) ad platform Publica to accelerate its growth ambitions. The integration is a major step in Smart’s commitment to building a scaled, vertically-integrated TV advertising platform for media buyers and sellers following its recent acquisition of global premium CTV demand-side platform (DSP) […]

Edge Creates First Local Campaign For Nevro, “I Am Not My Pain”
  • Campaigns

Edge Creates First Local Campaign For Nevro, “I Am Not My Pain”

Independent creative agency Edge has launched Nevro’s first local campaign, “I am not my pain”. Nevro is a medical technology company offering innovative solutions to chronic pain. Their HFX therapy has been available in Australia since 2011 and is a form of spinal cord stimulation (SCS), where an electrical device is implanted surgically near the […]

IPG Unveils “Remarkable” 15% Q3 Growth
  • Advertising
  • Media

IPG Unveils “Remarkable” 15% Q3 Growth

With COVID behind it and no gigantic meteors on the horizon, Interpublic predicting healthy growth into 2022.

by B&T Magazine

B&T Magazine
Pinterest Announces New Tools, Features and Experiences For Users
  • Media

Pinterest Announces New Tools, Features and Experiences For Users

Pinterest has introduced a new suite of creator and Pinner products and experiences globally, as the platform continues to evolve to become home for the next generation of creators. At its second annual Pinterest Creators Festival, featuring Megan Thee Stallion and Storm Reid.  Pinterest creators Kerin Rose Gold, Wendy’s World, Henri Purnell, Carolina Gelen and […]