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The market power of Google is being taken to task by the Australian Competition and Consumer Commission (ACCC) in a new report that singles out the tech giant's dominance in the $3.4 billion digital advertising sector.
Hot on the heels of moves by the government to force a mandatory code of conduct on the likes of Facebook and Instagram to pay for news shared on their platforms, the ACCC report has called for new measures to improve transparency and competition in the digital advertising market which in some instances is monopoly controlled by Google.
"These issues add to the cost of advertising for businesses, which will ultimately impact the prices paid by consumers," says ACCC chairman Rod Simms.
The latest broadside against Google follows the ACCC's legal action last year in the Federal Court alleging the tech giant had misled consumers to expand the scope of data it gathers for targeted advertising.
As the largest provider of key ad tech services identified by the latest ACCC report, Google is also the only provider that also sells ad inventory.
The ACCC estimates Google's share of the revenue or ads traded in Australia ranges from 50-60 per cent to between 90-100 per cent, depending on the service.
It says this is reinforced by its access to data from Google Search, Chrome and Android, and from its 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," says Sims.
"During this inquiry we have heard concerns from parties 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."
The ACCC cites all advertisements sold on YouTube, which is owned by Google, being sold exclusively through Google's own platforms.
Concerns have also been raised over Google's restrictions on its rivals to access different types of data, such as its move to block access to the DoubleClick ID and its proposal to block third-party cookies on Chrome.
The ACCC's preliminary report has listed a range of options to address the issues confronting the industry.
The most radical is to mandate the breaking up of datasets held by large incumbents, to make it easier for rival ad tech providers to enter and compete in the supply of ad tech services.
Among the other suggestions to boost competition is the approach suggested by UK and European authorities for a set of rules to manage conflicts of interest and prevent self-preferencing in the supply of ad tech services.
There are also proposals to enhance the ability of ad tech providers 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 ACCC report also recommends boosting data portability, where a consumer's data can be moved or shared at their request, and interoperability, allowing data to be shared between firms without a request from a consumer.
According to the ACCC, the balancing act it faces in making any changes is to maintain an eye on protecting the privacy of consumers while enhancing competition and transparency.
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Business News Australia
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