ACCC spotlight turns to Google’s ad dominance


Denham Sadler
Senior Reporter

The competition watchdog is set to propose a range of legislative changes aimed at curbing Google’s display advertising dominance after handing down an interim report into advertising technology services.

The Australian Competition and Consumer Commission (ACCC) released its interim report from its Digital Advertising Services Inquiry, launched in February last year following its digital platforms inquiry.

The 222-page report details a number of possible policy and regulation changes that the ACCC may recommend to government, including the introduction of Consumer Data Right-style open data scheme around ad tech services and user data.

It also highlights mandatory data siloes and limits to the use of data from user-facing services for targeted advertising, as well as new rules to manage conflicts of interest and self-preferencing.

Rod Sims
Rod Sims: A burning spotlight on the digital advertising market

It found that Google likely engages in anti-competitive behaviour in the ad tech services sector, facilitated by its “unparalleled” access to user data, and often favours its own products.

The ACCC said that Google enjoys about 70 per cent of the total revenue from ad tech services in Australia and has 70 per cent of impressions across users and businesses.

“The ACCC considers that, due to Google’s presence across the ad tech supply chain, its strong position in the supply of certain services, and the opacity of the supply chain, Google is likely to have the ability and incentive to favour its own related business interests,” the report said.

“The ACCC is concerned that the presence of conflicts of interest can result in poor outcomes for advertisers and publishers. Google’s leading position across the entire ad tech supply chain means it has attracted conflict of interest concerns of this kind.”

This lack of competition in the ad tech sector is hurting consumers, publishers and advertisers, ACCC chair Rod Sims said.

“There is a real lack of competition, choice and transparency in this industry. These issues add to the cost of advertising for businesses, which will ultimately impact the prices paid by consumers,” Mr Sims said.

“Google’s significant presence across the whole ad tech supply chain, combined with its significant data advantage, means Google is likely to have the ability and the incentive to preference its own ad tech businesses in ways that affect competition.”

The ACCC is now seeking feedback on the number of proposals to address these issues that are included in the report.

These include new regulations making it easier for users to access the data that companies such as Google hold on them, and to transfer this to smaller ad tech competitors in an effort to improve competition. But the report said such a policy comes with risks.

“Any measures to increase data mobility should be carefully designed to ensure that there are effective mechanisms to manage the risks that de-identified data may become re-identified and to ensure that consumers have effective controls over the sharing of their personal data,” the report said.

The competition watchdog is also looking at a number of potential policies to address the wealth of data that Google holds that gives it a huge advantage in the ad tech services industry.

These include the introduction of data silos or purpose limitation requirements that could level the playing field.

“In order to promote competition by levelling the playing field in relation to the data advantage of large digital platforms, the ACCC is considering measures directed at mandating data separation within companies in limited circumstances,” the ACCC report said.

“This would prevent data gathered in the context of supplying one service from being used in the supply of a different service.”

A similar policy was recently recommended by the UK competition watchdog and initially supported by the government.

This could be done through directly regulating the internal sharing of data within Google, the ACCC said, such as preventing the use of datasets from being used for advertising or giving consumers the ability to control whether data collected on them from user-facing services can be used for targeted ads.

While the ACCC is yet to decide whether Google has breached the Competition and Consumer Act with its conduct around ad tech services, it is seeking feedback on whether rules should be introduced to prevent the competition issues such as self-preferencing and conflicts of interest.

These could include rules requiring equal access to ad tech services and to increase transparency.

The ACCC may also recommend the introduction of a voluntary industry code to verify ad tech services and increase the availability of data, and the implementation of common transaction IDs and common user IDs to help with tracing across the supply chain.

Do you know more? Contact James Riley via Email.

Leave a Comment

Your email address will not be published.

Related stories