ACCC slams Google for creating ‘systemic competition concerns’ in ad tech space | ZDNet

The Australian Competition and Consumer Commission (ACCC) has found Google has a dominant market position when it comes to the ad tech sector, which it said has created “systemic competition concerns”.

Published as part of its final report [PDF] for its ad tech inquiry, the ACCC’s findings state that competition for supplying ad tech services has become ineffective due to Google’s dominant market position.

“In 2020, we estimate that over 90% of ad impressions traded via the ad tech supply chain passed through at least one Google service. Google is by far the largest supplier of each key ad tech service,” the report said.

“Over more than a decade, Google’s vertical integration and strength in ad tech services has allowed it to engage in a range of conduct which has lessened competition over time and entrenched its dominant position.”

From analysing open display ads — which are online ads except for those shown on a general search engine or classifieds websites traded on open channels — the regulator found Google’s share of impressions for the four main ad tech services used in Australia was between 70-100% and, for those ad tech services where revenue information is available, Google’s share of revenue was between 40-70%.

The remaining amount of revenue was primarily split among eight other demand-side platform competitors, the report said.

Through the inquiry’s duration, Google has said the ACCC’s probe was focused on a narrow part of the ad tech market due to it only analysing open display ad practices.

According to the ACCC, AU$2.8 billion was spent on open display advertising in Australia last year, which was what the probe analysed. This represents about 43% of total display advertising and 30% of total digital advertising spend for 2020, the ACCC added.

“We have identified systemic competition concerns relating to conduct over many years and multiple ad tech services, including conduct that harms rivals,” ACCC chair Sims said.

“We are concerned that the lack of competition has likely led to higher ad tech fees. 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 ACCC said Google achieved this dominant market position through accessing a large volume and range of first-party data, gathered through Search, Maps, and YouTube, to gain a competitive advantage in the supply of ad tech services.

During the inquiry, Google has submitted it does not use its first-party data to provide targeted advertising.

The ACCC also said Google has fuelled a systemic transparency problem in the ad tech sector due to the company not providing visibility over the total fees or take rates — total fees and charges by tech service providers across the supply chain in relation to that advertising opportunity or transaction — to advertisers and publishers.

“We are concerned that the lack of transparency of fees across the supply chain undermines trust in the ad tech supply chain, and limits the ability of advertisers and publishers to make informed decisions about the best way to buy and sell in the ad tech supply chain,” the report said.

To address these competition concerns, the ACCC is seeking for government to provide it with powers to develop sector-specific rules targeted at certain players in the ad tech market that have a certain pre-defined level of market power or strategic market position.

The ACCC added it was currently considering specific allegations against Google under existing competition laws, but flagged that the powers of existing regulatory solutions were limited.

Among the rules the ACCC would like introduced are new obligations aimed at managing conflicts of interest that arise when an ad tech provider, like Google, is a supplier of services across the supply chain. Currently, Google can act on behalf of both the buyer and seller of ads while also operating the ad exchange connecting these two parties.

Other rules the ACCC has considered are transparency requirements for ad tech providers and requirements that certain ad tech providers do not use information about the operation of one ad tech product to supply another ad tech product.

In addition to implementing new regulatory powers, the ACCC also recommended for Google to amend its public material so that it better explains how it uses the data collected about consumers for providing ad tech services.

“This should include a description of how both non-aggregated first-party data (data about a single consumer) and aggregated first-party data (such as combined data from multiple consumers) is used to provide ad tech services which enable the display of advertisements on third-party websites and apps,” the report said.

The competition watchdog has also called for industry to establish standards that require ad tech providers to publish average fees and take rates for ad tech services. Honing in on Google, it said the tech giant should voluntarily provide publishers with additional information on the operation and outcomes of its publisher server auctions to increase the transparency of its publisher server auctions.

With the ad tech services inquiry now wrapped up, Australia’s competition watchdog will look to consider broader regulatory changes to digital platforms as part of its other tech inquiry — the Digital Platform Services Inquiry.

“How the recommendations in this report should be given effect, including the legal framework for the proposed rules and powers will be considered as part of a broader ACCC report due in September 2022,” Sims said.

Being the main target of the probe, Google has repeatedly stated in the past it does not stifle competition in ad tech and its services provide various benefits to advertisers.  

RELATED COVERAGE

For all the latest Technology News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechNewsBoy.com is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.