Google unfairly muscled out online ad rivals, Australia watchdog says

Google unfairly muscled out its online advertising rivals, Australia’s watchdog says as it calls for new powers to curb the tech giant

  • Australia’s competition watchdog published a report into Google’s ad business 
  • Found Google unfairly muscled out rivals by dominating ‘ad tech supply chain’
  • Google also used access to big data and its own advertising platforms such as YouTube to strong-arm customers into using its services 
  • Regulator has asked for new powers to curb the behaviour, teeing up Australia’s latest showdown with big tech after stand-off with Facebook in February 

Australia’s anti-trust watchdog has accused Google of unfairly muscling-out its online advertising rivals and asked for new powers to help curb the abuse.

The tech giant leveraged its access to huge amounts of data as well as its ownership of ad platforms such as YouTube to dominate the ‘ad tech’ market, according to a report by the Australian Competition and Consumer Commission.

Commissioners now want new powers including the ability to dictate how consumer data is used in advertising to curb Google’s power.

The government will now decide whether to grant those powers, teeing up a new showdown with big tech following a spat with Facebook back in February which saw the social media giant temporarily remove news from its platform in Australia.

The report comes amidst an EU investigation into Google’s advertising practices in Europe, and as the US justice department prepares a lawsuit against the company, also over advertising.

Google has been accused of unfairly muscling out its online advertising rivals using data it collects and its dominance of the ‘ad tech supply chain’

In its report, published on Tuesday, the ACCC examined Google’s role in the ‘ad tech supply chain’ – a complicated network of services that decide what adverts are shown to users when they click on a webpage.

The ‘supply chain’ works by auctioning off advertising space on a given website to potential buyers – sometimes using data about who is clicking on the webpage – in a fraction of a second as the page loads.

The report found that Google is ‘the largest supplier across the entire chain.’

In 2020, it said that a full 90 per cent of advertising ‘impressions’ – the number of times an advert is seen – passed through at least one Google supply chain service. 

At certain points in the chain, particularly for sites wanting to sell adverts, Google possesses a near-total monopoly on servers used to facilitate the sales, it added.

This meant that Google was able to squeeze out rivals by prioritising demand from one side of the chain for supply it controlled on the other, and visa versa. 

Google was also able to use the huge amount of data it gathers from its search and mapping aps to help target advertising at users, making it more appealing to those looking to buy advertising space.

While the tech firm told investigators that it does not use data to target adverts on sites it doesn’t own, they found that advertisers are often not aware of this due to ambiguities in Google’s marketing – giving it another advantage. 

And, as a supplier of advertising space through platforms like YouTube, Google was also able to sway customers by restricting YouTube ad space to those using its services, the report said.  

‘Google has used its vertically integrated position to operate its ad tech services in a way that has, over time, led to a less competitive ad tech industry,’ ACCC Chair Rod Sims said in a statement.

‘This conduct has helped Google to establish and entrench its dominant position in the ad tech supply chain. 

We recommend rules be considered to manage conflicts of interest, prevent anti-competitive self-preferencing, and ensure rival ad tech providers can compete on their merits.’

A Google spokesman was not immediately available for comment. In a blogpost published shortly before the ACCC report, Google said its advertising technology supported over 15,000 Australian jobs and contributed $2.45 billion a year to Australia’s economy annually.

The ACCC said the U.S. company benefited from vast amounts of internet user data from its search engine, mapping and YouTube video streaming services, and must be more transparent about the way it uses this information to sell advertisements.

Australia’s last battle with big tech came in February when a stand-off with Facebook led to news being removed from its site for a time 

The regulator said it wanted special powers to address the imbalance of advertiser access to consumer data, such as rules stopping a company from using data collected by one service – such as mapping – to sell targeted advertisements without a rival company getting the same benefit.

It said it also wanted Google to be made to clarify publicly how it used people’s data to sell and display advertisements.

The ‘ad tech’ report was part of the ACCC’s wider examination of online platforms which earlier this year prompted Google to say it might withdraw core services from the country over laws forcing it to pay for media content that features on its websites.

Google has since announced content payment deals with most of Australia’s largest media outlets, as did social media giant Facebook Inc which did cut news feeds in the country for a week in the days before the law was passed.

Treasurer Josh Frydenberg, who commissioned the report, said in a statement the government would consider the report’s findings and recommendations.

Source: Read Full Article