Next up, ad tech: ACCC seeks views on fixing monopoly

Jan 27, 2021 at 06:36 pm by Staff


With Google's share of ad revenue in Australia at between 50 and 100 per cent, "lack of competition and transparency" in the ad tech supply chain impacts everyone, the ACCC says.

In the interim report of its inquiry into digital advertising services, the competition regulator says publishers, advertisers and consumers are impacted, "and (this) needs to be addressed".

The inquiry, established last February, probes a supply chain which enables the "near instantaneous" delivery of $3.4 billion of digital display advertising opportunities on news, entertainment and other websites and apps each year.

"Digital advertising is, in essence, how consumers' attention and data are monetised," says ACCC chair Rod Sims. Issues of "real lack of competition, choice and transparency" add to the cost of advertising, ultimately impacting prices paid by consumers.

The report says - among "many ad tech providers" in Australia - Google is by far the largest provider of all of the key ad tech services examined by the report, and the only provider across the full ad tech supply chain that also sells ad inventory.

The ACCC estimates that Google's share of the revenue or ads traded in each of the required services in Australia ranges from 50-60 per cent to between 90-100 per cent, depending on the service.

Acquisitions over time have cemented Google's strong position, "further reinforced by its unrivalled access to data" from consumer-facing services such as Search, Chrome and Android, and from a wide network of trackers on third-party websites and apps.

"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".

Sims says the inquiry heard concerns about potential conflicts of interest from Google's various roles in this industry. "This includes Google very often acting on behalf of both publishers and advertisers for the same ad sale across the ad tech supply chain, while also selling its own ad inventory."

Inventory on Google-owned YouTube' is sold exclusively through Google's own platforms, and Google uses its own 'open bidding' auctions to avoid header bidding auctions run by publishers, "which means publishers who wish to receive real-time bids from advertisers using Google's ad tech services must use Google's publisher ad server".

Sims says the inquiry also heard concerns about the competitive effect of Google's restrictions on rivals' access to different types of data, for example its move to block access to the DoubleClick ID and its proposal to block third-party cookies on Chrome.

The ACCC is looking for feedback on suggested options to address the issues, including establishing rules to manage conflicts of interest and prevent self-preferencing - as proposed in the UK and Europe - and making it easier to assess the price and quality of services, including requiring demand-side platforms to allow independent verification and that the industry implement common transaction and user IDs.

The regulator is also looking at ways of promoting competition through boosting data portability - allowing a consumer's data to be moved or shared at their request - and interoperability (allowing data to be shared between firms without a request from a consumer). One option is to require firms with a significant data advantage to provide consumers with an easy way to port their data between rivals.

It will also consider mandating the breaking up of datasets held by large players to make it easier for rival ad tech providers to enter and compete. The report also supports a previous recommendation to outlaw unfair practices and appoint an ombudsman.

The report is available on the ACCC's website. Submissions to the preliminary report are due by February 26 February. The ACCC is due to provide its final report by August 31.

Michael Miller, News Corp's Australasia executive chairman, commented that the interim report "shines a light on Google's pervasive commercial power that impacts the entire Australian economy not just the publishing industry".

Ad tech plays an increasing role as the move from broadcast free-to-air TV to 'catch-up' services in which targeted videos are shown during ad breaks, as well as when image or video ads are shown during browser viewing of a website on a desktop or mobile. The inquiry examined four key ad tech services - advertiser ad servers, demand side platforms, supply-side platforms and publisher ad servers.

In the US, a complaint filed by the Texas attorney-general on behalf of nine US states last month alleges Google "has monopoly power and forecloses competition in the markets for publisher ad server for display inventory, display ad exchanges, display ad networks and separate markets for display ad buying tools for large and small advertisers".

Sections: Digital business

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