The Australian Competition and Consumer Commission (ACCC) on the 28th of September 2021 released a report about Google’s dominance in the country’s ad-tech supply chain.
The ACCC believes that existing enforcement auctions under Australia’s competition law are obsolete in controlling Google’s monopoly over online advertising. This commission urges new laws to be implemented to foster better competition in the ad tech sector for the benefit of businesses and consumers.
This is not the first time Alphabet Inc. is slapped with such allegations. Currently, the U.S. Justice Department is preparing an anti-monopoly lawsuit against Google for using its strengths against smaller ad tech companies. Europe and the U.K are also consulting on laws to hinder Google’s market dominance from the data of user’s online searches.
Google’s Data Access Puts It Too Far Ahead of Competitors
Other ad tech companies are overpowered by Google, primarily because the latter have unparallel access to consumer and other data, access to exclusive inventory, and integration across ad tech services.
Unlike rivals, Google also supplies ad inventory to its properties like YouTube, Gmail, and Google Search. The ACCC report accused Google’s publisher ad server of giving preference to its supply-side platforms (SSP), limping other SSPs’ ability to compete.
By leveraging on both sides of advertising with opposing interests, the advertiser and publishers, it is feared that Google might harm both parties. On top of that, the vertical integration of services that Google offers is what ACCC Chair Rod Sims claimed to have created a less competitive ad tech industry.
Businesses and Consumers Suffer Due to Ad-Tech Monopoly
A 2020 estimate of the Australian Ad displays shows that over 90% of ad impressions would pass at least one of Google’s services. This American company also claimed 40-70% of revenue services where revenue information is available.
The ACCC report estimated that at least 27% of an advertiser’s spending on ads through the ad tech supply chain was retained by ad tech providers in 2020. Looking at this figure, many concerns arise regarding the lack of competition in online advertising.
Rod Sims elaborates that an inefficient ad tech industry causes a higher cost for both publishers and advertisers alike and this may damage the quality and quantity of online content. Consumers would then end up paying a higher price for advertised products.
Recommendations for a Balanced Competition in The Ad Tech Supply Chain
The ACCC recommends the industry outline clear standards as it was found that the operation and pricing of ad tech services lack transparency. Partly due to the complex nature of the supply chain, it is hard for advertisers and publishers to understand how the system operates and detect misconduct.
Therefore, ad tech companies need to be clear about the average rates and fees they’re charging, so clients can compare these prices between different ad tech companies.
It also recommends an industry standard to allow complete and independent verification of the services that advertisers use in the supply chain.
In the interest of publishers, Google should provide them with information about the operation and outcomes of its publisher ad server auctions.
“If Google fails to provide sufficient information, or the industry’s voluntary standards do not achieve transparency, then new requirements should be able to be put in place to address this,” Mr. Sims said.
