Google dominates adtech and hurts markets • The Register


Google completely dominates Australian advertising, and only new rules can limit the damage its dominance does to local and global markets.

This is what the Australian Competition and Consumer Commission (ACCC) says in the final report of its survey of digital advertising services, released Tuesday.

The central thrust of the report can be guessed from the title of a subtitle of its summary: “Google’s dominance in the ad technology supply chain creates problems for competition, advertisers and publishers.”

The report supports this claim with an estimate that “over 90% of ad impressions exchanged through the ad technology supply chain have passed through at least one Google service.”

“Google is by far the largest provider of each key ad technology service. Its share of impressions is over 70% at every stage of the supply chain, and it has a share of between 40 and 70% of revenue for services where revenue data is available, ”the report adds.

The search and advertising giant has achieved this dominance through “multiple factors, including its data advantage, access to proprietary inventory and on demand from advertisers, and integration of its services.” Google’s dominance also stems from its unusual status as an operator of sites offering advertising and ad publisher for competing properties. And Google hasn’t been shy about using that integration to its advantage, doing things like restricting access to YouTube for third-party advertisers.

The report assesses that the cumulative effect of Google’s behavior “has been to prevent current and future rivals of Google’s ad technology services from effectively competing with Google’s vertically integrated services.”

“The lack of effective competition in offering ad technology services also hurts publishers and advertisers, depriving them of lower prices, better quality services and / or greater innovation. less competition is ultimately passed on to consumers. “

What to do? The report believes that Google needs to be more transparent about how it uses the data it collects on users, and specify this in its terms of service and privacy policies.

The regulator also believes that Google should reveal more information on advertising markets, as participants today find it difficult to compare the offers made by competitors to the search colossus.

But even if Google does what the ACCC wants, the regulator believes the time has come to give it new powers to control the advertising giant.

The report contemplates “powers to develop rules to manage conflicts of interest, prevent anti-competitive self-preference, ensure that competitors can compete on their merits by having non-discriminatory access to certain services, and address transparency concerns. “. Industry participants would be consulted to define the powers that the regulator should exercise.

The ACCC wants these rules and the powers they confer to align with similar efforts to regulate digital advertising currently underway in the European Union, the United States, Japan and Germany.

The Australian regulator took shape on Google, sometimes with impactful results. For example, the news media trading code in Australia requires Google and Facebook to pay local publishers for the right to link to their news content. The Code has been noted with considerable interest by regulators around the world. The ACCC’s findings in this case will likely be noted beyond the Australian coast as well. ®

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