In a new report, the Australian Competition and Consumer Commission (ACCC) found that competition for ad tech services was "ineffective" and that new rules were required to limit the search giant's overwhelming market presence.
"Google is by far the largest supplier of each key ad tech service," the ACCC said in the study, the latest in a series on digital platforms. The regulator's focus is on what is called the open online display ad market, in which ads are sold in complex real-time auctions as users click onto a page or an app. The market was worth around A$2.8 billion ($2.0 billion) last year, or roughly 43% of the total display ad market.
More than 90% of ad impressions traded via the ad tech supply chain passed through at least one Google service, the report said. "Its share of impressions is over 70% at each stage of the supply chain, and it has a share of between 40%–70% of revenue for services where revenue data is available. Google's dominance is underpinned by multiple factors including its data advantage, access to exclusive inventory and advertiser demand, and integration across its services."
The ACCC estimated that 27% of advertiser spend in the ad tech supply chain was retained by the ad tech providers in 2020.
It said Google's vertical integration and strength in ad tech services had also allowed it to engage in conduct that had reduced competition over the last decade.
The ACCC is weighing legal action against Google over allegations made during its inquiry, but it said legal enforcement alone under existing legislation was not enough to tackle its "systemic competition concerns."
It needed to be given the power to "develop sector specific rules" that it could apply to deal with issues such as conflicts of interest, anti-competitive self-preferencing and transparency problems. It urged Google to make a series of transparency measures, such as publication of total fees collected across the supply chain, and to show it used data collected from consumer services.
ACCC chairman Rod Sims told the Guardian the proposed rules were aimed at aligning with laws being developed in Europe and the UK.
The ACCC broke new ground last year with new rules that force Google and Facebook to share advertising income with news media. Most large Australian media companies have struck deals, though some smaller outlets complain they have been spurned.
— Robert Clark, contributing editor, Light Reading