ACCC widens offensive against Google
By Rohan Pearce
The Australian Competition and Consumer Commission has turned its attention to Google’s dominance of digital ad tech, with scrutiny of the βirm’s key role in the app market still to come.
The latest development provides perspective on Google’s threat last week to abandon the search market in Australia should it be compelled to face ex-ternal arbitration on payments for news content.
The regulator in late January, released an interim report for its digital advertising ser-vices inquiry that focuses on the company’s ad tech dominance in the Australian mar-ket and noted alleged anti-competitive behaviour and conβlicts of interest involving Google. The interim report said that the ACCC was: “still considering the effect that this con-duct may be having on competition across the ad tech supply chain,” and indicated that it would consider enforcement proceedings under the Competition and Consumer Act.
“Google’s signiβicant presence across the whole ad tech supply chain, combined with its signiβicant data advantage, means Google is likely to have the ability and the incen-tive to preference its own ad tech businesses in ways that affect competition,” said ACCC chair Rod Sims.
“During this inquiry we have heard concerns from parties about potential conβlicts of interest from Google’s various roles in this industry. This includes Google very often acting on behalf of both publishers and advertisers for the same ad sale across the ad tech supply chain, while also selling its own ad inventory.”
The ACCC cited the example of YouTube’s ad inventory being sold exclusively through Google’s own platforms. Possible measures raised by the ACCC to address Google’s grip on the market in-clude new rules to man-age conβlicts of interest and prevent self-preferencing in the sup-ply of ad tech services and measures to en-hance the ability of ad tech providers to assess the price and quality of services.
Other options involve boosting data portability and interoperability, as well as mandating the break up of datasets held by large incumbents. “Google acknowledges the release of the Interim Report, and we have engaged con-structively with the ACCC as part of this process,” a Google spokesperson told CommsDay.
The spokesperson added that ad tech: “is a competitive market with low barriers to entry. There are many companies, large and small, working together and in competition with each other to power digital advertising across the web, each with different specialties and technologies. Google is just one of these many players, and we’ve made it easier for others to choose who they want to work with.”
The spokesperson said the company has invested in promoting a healthy ad tech ecosystem, seeking to balance the interests of users, advertisers and publishers. That includes “creating privacy-enhanced measurement solutions, developing major innovations in auction technology, and participating in industry initiatives designed to foster the long-term viability of an ad-supported digital advertising ecosystem.”
“We’ll continue to participate constructively in this process as the ACCC’s ad tech inquiry continues,” the spokesperson said.
The inquiry is part of a widening offensive by the competition regulator against Google, which already includes two Federal Court cases against the digital juggernaut focused on its gathering of location data in Android and a separate one dealing with the decision in 2016 to start combining users’ Google Account data with data gathered from its online advertising platform.
GOOGLE PLAY: Also under scrutiny by the ACCC is the dominance of Google Play in the app marketplace space, with mobile app distribution part of the regulator’s digital platform services inquiry, which kicked off in early 2020 and will conclude in March 2025.
In addition the ACCC is examining Google’s acquisition of wearables maker Fitbit, with the regulator indicating it could take legal action after the deal was closed before it had completed its review of the merger.
The key βlash point thus far, however, has been the news media and digital plat-forms mandatory bargaining code, which was developed by the ACCC in the wake of the Digital Platforms Inquiry.
The underpinning legislation for the code, which initially at least will target Google and Facebook, is currently being scrutinised by the Senate’s economics committee. Appearing at a hearing held last week by that committee, Google’s ANZ managing director Mel Silva said that a provision in the code that would require the search en-gine operator to pay to display links and snippets of articles from publishers would “set an untenable precedent” for the company and the digital economy.
“It’s not compatible with how search engines work or how the internet works,” Silva said, adding that if a version of the code with such a provision became law “it would give us no real choice but to stop making Google Search available in Australia”.
Google in its written submission has argued that there is a path to a workable bar-gaining code but it objects to “untested” and “one-sided” arbitration provisions, the re-quirement to pay for links to news articles and provisions that would require it to pro-vide advance notice to publishers of algorithm changes that the company said: “misconceive how our systems operate, are unworkably broad and Google cannot op-erationalise them as written.”
As a business, Google is a signiβicant user of telecom services including datacentre space and capacity on subsea cables to Australia. Search is the only service that Google has suggested it could withdraw from the Australian market.
(This article first appeared in Communications Day).