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Google’s dominance in advertising supply chain harms Aussie consumers

Competition and Consumer Commission report delivers a damning condemnation of how Google dominates the advertising technology sector.

Mike Simpson by Mike Simpson
28-09-2021 15:20
in News
Image by 377053 from Pixabay

Image by 377053 from Pixabay

An Australian Competition and Consumer Commission (ACCC) inquiry into the advertising technology – or ‘ad tech’ – sector has identified significant competition concerns and likely harms to publishers, advertisers and, ultimately, consumers.

The report, published today (28 September), concludes that enforcement action under Australia’s existing competition laws alone is not sufficient to address the competition issues in the sector, and that the ACCC should be given powers to develop specific rules in response.

Ad tech services facilitate complex transactions for the selling and buying of advertising space on websites or apps, resulting in the ads that are displayed to consumers.

Dominant position in key parts of the supply chain

The report finds that Google has a dominant position in key parts of the ad tech supply chain and estimates that more than 90 percent of ad impressions traded via the ad tech supply chain passed through at least one Google service in 2020.

Google’s dominance in the ad tech supply chain is underpinned by multiple factors including its access to consumer and other data, access to exclusive inventory and integration across its ad tech services. Key acquisitions by Google, including of DoubleClick in 2007, AdMob in 2009, as well as YouTube in 2006, have helped Google entrench its position in ad tech.

The report finds that Google has used its position to preference its own services and shield them from competition. For example, Google prevents rival ad tech services from accessing ads on YouTube, providing its own ad tech services with an important advantage.

Won’t participate in publisher-led header bidding

Google has also refused to participate in publisher-led header bidding, an industry innovation aimed at increasing competition for publishers’ inventory, and previously allowed its services to have a ‘last look’ opportunity to outbid rivals.

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“Google has used its vertically integrated position to operate its ad tech services in a way that has, over time, led to a less competitive ad tech industry. This conduct has helped Google to establish and entrench its dominant position in the ad tech supply chain,” ACCC Chair Rod Sims said.

“Google’s activities across the supply chain also mean that, in a single transaction, Google can act on behalf of both the advertiser (the buyer) and the publisher (the seller) and operate the ad exchange connecting these two parties. As the interests of these parties do not align, this creates conflicts of interest for Google which can harm both advertisers and publishers.”

Tags: advertising in AustraliaAustralian Competition and Consumer CommissionConsumer ProtectionGoogle
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