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ACCC calls out Google for dominance of digital ads

The competition watchdog has argued that Google’s dominance of digital advertising could lead to higher prices for Australian businesses. 

ACCC Chair Rod Sims said a competitive ad tech supply chain is important for Australian advertisers, publishers and ultimately consumers.

Speaking at a Global Competition Review webinar about the ACCC’s Digital advertising services inquiry, Mr Sims said that without strong competition in the ad tech supply chain advertisers and publishers pay more for ad tech services. 

When publishers receive less for the advertising space on their websites or apps, this is likely to lead to less and poorer quality online content for consumers. Increased fees for advertisers results in consumers paying more for advertised goods, he said.

The final report of the ACCC’s Ad tech inquiry, released last month, found that competition for ad tech services is ineffective and that Google dominates the ad tech supply chain.

“Google’s vertical integration and dominance in the supply chain, as well as its strong position in related services such as YouTube, has allowed it to engage in leveraging and self-preferencing conduct, which have likely interfered with the competitive process,” Mr Sims said.

“Over time, this conduct has lessened competition for ad tech services and allowed Google to establish and entrench its dominant position in the ad tech supply chain. This vertical integration has also created conflicts of interest, which can harm advertisers and publishers.”

“The lack of competitive pressure and transparency means there is little incentive for Google to manage these conflicts, and unlike other industries, such as financial services, there are no regulations requiring Google to manage these conflicts,” Mr Sims said.

The Ad tech inquiry recommended the ACCC be given powers to develop sector specific rules to address conflicts of interest and competition issues in the ad tech supply chain.

“Many other competition regulators have also closely examined ad tech markets and have identified many similar issues to the ACCC, and are in the process of developing regulatory interventions to address these issues,” Mr Sims said.

“Our recommendations, and in particular, the need to introduce sector specific rules, are broadly consistent with these proposals which are being put forward overseas.”

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