ADVERTISING TECHNOLOGY

Google’s dominance of ad tech supply chain harms consumers

By our News Team | 2021

An Australian Competition and Consumer Commission report criticises Google’s dominance of the advertising technology sector.

The Australian Competition and Consumer Commission (ACCC) recently conducted an inquiry into the advertising technology (ad tech) sector. It highlighted competition concerns relating to Google’s market dominance and the potential for harm to publishers, advertisers and, ultimately, consumers.

In September it published a report suggesting that enforcement action under Australia’s existing competition laws would not be sufficient on its own to address the competition issues in the sector. It therefore concluded that the ACCC should be given powers to develop specific rules in response.

Ad tech services facilitate complicated transactions involving the buying and selling of advertising space. This can be either on websites or apps, giving rise to ads that are displayed to consumers.

A dominant position in vital parts of the supply chain

Advertising Technology

Photo by Firmbee.com

The report finds that Google controls a dominant position in key parts of the ad tech supply chain. It estimates that more than 90% of ad impressions traded via the ad tech supply chain passed through at least one Google service in 2020.

“Google’s activities across the supply chain also mean that, in a single transaction, Google can act on behalf of both the advertiser (the buyer) and the publisher (the seller) and operate the ad exchange connecting these two parties. As the interests of these parties do not align, this creates conflicts of interest for Google which can harm both advertisers and publishers,” ACCC Chair Rod Sims said.

The ACCC report noted that Google used its dominant position to give preference to its own services, shielding them from competition. For example, Google prevents rival ad tech services from accessing ads on YouTube. This provides its own ad tech services with an important advantage.

Google enjoys access to consumer and other data, access to exclusive inventory and integration across its ad tech services. Key acquisitions by Google, including of DoubleClick in 2007, AdMob in 2009, as well as YouTube in 2006, helped Google entrench its position in ad tech.

 

Source: Australian Competition and Consumer Commission