The Australian Competition and Consumer Commission (ACCC) isn't backing down from its fight with Google, this time going after the search giant in the name of advertising technology -- ad tech -- market regulation.
The ACCC on Thursday published a 222-page Digital Advertising Services interim report [PDF]. It follows the announcement from a year ago that the watchdog was going to probe the ad tech sector.
"Effective competition in the ad tech industry is important for Australian consumers," the executive summary declared. "If advertisers pay too much for digital advertising, the costs will be passed on to consumers in the form of higher prices for goods and services. If publishers receive too little revenue for their advertising inventory, consumers will face a reduction in the quality and variety of online content."
In scope for its inquiry is ad tech services that deliver personalised digital display advertising on websites and apps, and associated advertising agency services.
The ad tech inquiry will focus on what the ACCC has labelled as "Google's industry-leading position".
"While there are a large number of ad tech providers across the supply chain as a whole, Google is by far the largest provider of each of the four key ad tech services considered. The report considers the reasons for, and implications of, Google's position," the report said.
Facebook is off the hook for now as the ACCC said, despite submissions to the contrary, unlike Google, Facebook does not sell its own ad inventory in the "open display market" or through the ad tech supply chain. Instead, Facebook uses its own closed systems to sell inventory directly to advertisers.
"Google's high share of impressions suggests that the competitive constraints on Google are not substantial," the report said.
Contributing to Google's strong position in the supply of ad tech services, the ACCC said, is that it provides access to a larger group of advertisers and publishers, as well as better access to greater volume and particular types of ad inventory.
Its ad targeting capability, which is linked to the breadth and depth of the data available to Google as a result of its activities across consumer-facing and advertising markets, is also bad, the ACCC highlighted. As is the ease of use and integration of Google's services other than Search.
With acquisitions on a different fight card, the ACCC said Google scooping up the likes of YouTube, DoubleClick, AdMob, and AdMeld have contributed to its strong position in the supply of ad tech services and assisted its expansion into related markets.
"Google collects an extensive amount of high quality data from a range of first and third-party sources. Google's 60 plus consumer-facing services means it has one of the broadest networks for first-party data collection," the ACCC said.
This includes data provided on signing up for a Google Account, such as name, date of birth, gender, email, phone number; data provided through use of consumer-facing services, including search histories, location history, and movement data from Google Maps, and interests and hobbies from the likes of YouTube and Gmail; data collected from Google devices, such as Android phones and Google Home devices, as well as data from its own app portfolio and those of third parties; payment data, such as credit card information; and the information it gathers from having the "broadest network of third-party data".
"Google's scripts were found on over 80% of the most popular 1,000 websites in Australia … Google's SDKs were embedded in 91% of the most popular 1,000 apps on Google Android devices," it added.
The report poses a number of questions for respondents to prepare submissions by February 26; it also proposes a handful of recommendations. The questions range from the data collected to serve up targeted ads and who is providing that data, to considering if there is a barrier to entry for new players with Google's dominance.
The ACCC is considering two potential recommendations to reduce data-related barriers to entry and expansion in the supply of ad tech services. The first, "Measures to improve data portability and interoperability", could, for example, mean a user would be able to instruct Google or Facebook to make certain types of data on their interactions on those platforms available to a news publisher or to another social network on request.
"The ACCC considers that increasing data portability and interoperability may promote competition in the supply of ad tech services by enabling market participants to more easily access and use information held by large platforms with a significant data advantage," the report said.
"The ACCC notes, however, that any measures to increase data mobility should be carefully designed to ensure that there are effective mechanisms to manage the risks that deidentified data may become re-identified and to ensure that consumers have effective controls over the sharing of their personal data."
The second proposal, "Data separation mechanisms", would mandate for data to be segregated within companies to prevent data gathered in the context of supplying one service from being used in the supply of a different service.
It also made a proposal to address concerns around conflicts of interest and self-preferencing, such as seen in Europe, and floated the potential implementation of a voluntary industry standard to enable "full, independent verification of DSP services" as a way of addressing supply chain "opacity".
The fifth proposal made by the ACCC is the implementation of a common transaction ID.
"Industry should implement a common system whereby each transaction in the ad tech supply chain is identified with a single identifier which allows a single transaction to be traced through the entire supply chain. This should be done in a way that protects the privacy of consumers," it wrote.
The ACCC is also considering if the implementation of a common user ID to allow tracking of attribution activity could also work. It wants to know whether the introduction of a common user ID could be used to improve the ability of third parties to provide independent attribution services.
"Based on information currently available to the ACCC, the ACCC's preliminary view is that many potential issues relating to ad agency conduct may be mitigated if advertisers: Know to look out for certain clauses in their contracts; understand those clauses, in order to make the best decisions for the needs of its business; shop around to ensure that they are receiving agency services that suit their needs; and exercise contractual rights of audit to ensure that agency behaviour is consistent with their contract," it said in conclusion.
The ACCC's preliminary view is also that government intervention is not required at the moment to respond to issues relating to ad agencies.
Google, alongside Facebook, has been engaged in a stoush with the watchdog since August over the Media Bargaining Code that entered the House of Representatives in late December.
The bargaining code, according to the government, is necessary to address the fundamental bargaining power imbalances between Australian news media businesses and major digital platforms.