The ACCC has declared Google is way too dominant in the ad tech space and isn’t letting the search giant off easy, vowing to tear down the secret sauce to its success: data.
The competition watchdog has had tech giants in its crosshairs for years. It ramped up action in July 2019 when it published its whopping 623-page Digital Platforms Inquiry report.
The inquiry has already seen so much action follow, including that time Facebook pulled news from Australia because legislation didn’t quite understand technology and politicians were determined to have tech giants pay “their fair share”.
But this particular probe is around ad tech, or advertising technology. The ACCC started work on this back in March last year, but in January, it wrote 222 pages-worth of justification for going after Google’s advertisement practices.
The ad tech inquiry, it says, focuses on “Google’s industry-leading position”.
In a report, published today, the ACCC says Google’s dominance in ad tech supply chain harms businesses and consumers.
The ACCC is currently considering specific allegations against Google under existing competition laws, but it says these powers aren’t enough – it wants more powers to develop specific rules. It also wants to take a peek at Google’s data pot of gold.
The ACCC estimates that more than 90 per cent of ad impressions traded via the ad tech supply chain passed through at least one Google service in 2020.
The watchdog argues that Google’s dominance in the ad tech supply chain is underpinned by its access to consumer and other data, access to exclusive inventory and integration across its ad tech services.
Buying DoubleClick in 2007, AdMob in 2009 and YouTube in 2006 have helped Google entrench its position in ad tech, the ACCC says.
But Why Is Ad Tech Dominance A Problem?
Well, according to the ACCC, a lack of competition in the space is bad.
“We are concerned that the lack of competition has likely led to higher ad tech fees,” chair of the ACCC Rod Sims said.
“An inefficient ad tech industry means higher costs for both publishers and advertisers, which is likely to reduce the quality or quantity of online content and ultimately results in consumers paying more for advertised goods.”
The watchdog has prepared 202 pages on why it considers this a problem, making six recommendations to fix it.
Three of those recommendations include giving the ACCC that power it wants to develop and enforce rules around transparency of price and performance, as well as the backing of lawmakers develop sector specific rules to address conflicts of interest and competition issues in the space and compel pricing info from ad tech players.
What Does The ACCC Want From Google?
Firstly, it wants Google to amend its public material so that it clearly describes how it uses first-party data to provide ad tech services.
It also wants Google to work with others in the industry to establish standards to require ad tech providers to publish average fees and take rates for ad tech services, and to enable “full, independent verification of demand side platform services”.
It also believes Google should provide publishers with additional information about the operation and outcomes of its publisher ad server auctions.
Basically, the ACCC wants Google to make it clear how it uses its data through public statements that skip the legal jargon, as well as make its terms and conditions and other material readable by those of us without a law degree.
Google Strikes Back
A Google spokesperson reached out to Gizmodo Australia to add its response to the ACCC report.
“Google’s digital advertising technology services are 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,” they said.
“As one of the many advertising technology providers in Australia, we will continue to work collaboratively with industry and regulators to support a healthy ads ecosystem.”
As the ACCC report only considers a narrow part of the digital advertising industry and largely excludes the role of significant players that Google competes with for ad spend, such as Facebook, TikTok and Twitter, it will be interesting to see if the watchdog probes them next.
Facebook is off the hook for now as the ACCC said, despite submissions to the contrary, unlike Google, Facebook does not sell its own ad inventory in the “open display market” or through the ad tech supply chain. Instead, Facebook uses its own closed systems to sell inventory directly to advertisers.