The ACCC has found that competition for Ad Tech services in Australia is ineffective and has asked the Federal Government for specific powers to regulate the industry.
Ad Tech
The Final Report for the Digital Advertising Services (Ad Tech) Inquiry was released by the Australian Competition and Consumer Commission (ACCC) in September 2021.
Ad Tech Services are services used in the automated buying, selling and delivery of digital advertising such as the advertising you see pop up on websites, apps and social media.
The ACCC found that competition for Ad Tech services in Australia is ineffective and made recommendations aimed at addressing anti-competitive conduct in the supply chain and increasing transparency.
Background
The inquiry commenced in March 2020 with the release of an issues paper. The Ad Tech Inquiry was an extension of findings in the Digital Platforms Inquiry Final Report that Google and Facebook hold significant market power in display and search advertising.
The ACCC published around 40 written submissions that commented on:
- the impact of using people’s personal information in the supply of digital ad services;
- how much information advertisers have about pricing and supply chains, and whether it is enough information to make informed choices about using Ad Tech services; and
- whether supplier behaviour is impacting competition, for example are the suppliers who are vertically integrated in the supply chain preferencing their own products to the detriment of their customers.
Final Report
The Final Report focused on Google and found its vertical integration and market strength in Ad Tech services has allowed it to engage in a range of conduct which has lessened competition in the market for Ad Tech services over time. This has entrenched Google’s dominant market position.
Key recommendations of the Report included allowing the ACCC to develop sector specific rules to manage conflicts of interest, restrict self-preferencing, allow competitors to access certain services and to require transparency. Rules would likely include prohibitions on bundling of services.
The Final Report recommended powers be given to the ACCC that enable the ACCC to address Google’s data advantage. These powers could include imposing data separation requirements on Google in relation to the consumer data it collects. The ACCC also recommended it should have a separate rule making power to improve transparency of pricing and performance of Ad Tech Services.
What’s next?
The ACCC has sought regulatory powers, specifically to address Google’s market dominance in Ad Tech. If awarded, the ACCC could prohibit Google from using first party data collected in their Ad Tech services or compel Google to share the data with other Ad Tech providers.
This is part of ACCC’s broader strategy to address the dominance of big tech. Industry will be watching the Federal Government’s response to the Report in 2022 with great interest.
