ACCC publishes findings of digital advertising services inquiry

Last month, the ACCC published the final report from its inquiry into markets for the supply of ad tech and ad agency services. The release marks the end of an 18-month inquiry into digital advertising services in Australia. 

The Inquiry focused on Google’s dominance in the ad tech service industry. Acknowledging that Google has dominated the buying and selling of digital advertising through open display channels for over a decade, the inquiry analysed the impact that this lack of competition has on industry stakeholders.

The ACCC has determined that Google engages in a range of anti-competitive conduct that limits innovation and negatively impacts the industry. Examples include Google barring rival services from Google-owned sites and allowing its services to have a ‘last look’ opportunity to outbid rivals. 

The Commission also noted that Google’s vertically integrated structure has led to conflicts of interest. The company’s presence throughout the supply chain means that it frequently acts on behalf of both the advertiser and the publisher, while also operating the ad exchange connecting the two parties. This absence of competitive pressure and regulation gives Google little incentive to manage conflicts that could potentially harm advertisers, publishers, and consumers. 

In light of these findings, the ACCC recommended that it be given powers to regulate Google and the industry as a whole. These regulations could potentially address Google’s data advantage by providing regulatory oversight for how Google uses first-party data collected through its consumer-facing services. The Commission also recommended that it be empowered to develop rules to address conflicts of interest and anti-competitive behaviour. 

If implemented, these recommendations would have an impact on how digital advertising is conducted in Australia. They have the potential to improve price and performance transparency across the industry and encourage innovations and more competitive pricing. However, ADMATIC’s Sarah Melrose cautions that any changes strike the balance between ensuring fair competition and burdening the industry with unnecessary regulations.

ADMATIC is committed to ensuring our clients are prepared for any industry changes. Reach out to ADMATIC today to learn more.