ACCC - Digital Advertising Services Inquiry (Ad Tech Report) and other key Inquiries

In it’s  AdTech Report, the ACCC concluded that Google is dominant across the Ad Tech supply chain and that this creates significant problems for competition, advertisers, publishers (and ultimately, consumers).

The ACCC’s Competition Concerns
The Report says that the ACCC has the following key concerns:

1. (Googles) Use of first party data
2. Google’s vertical integration leads to conflicts of interest
3. Self-preferencing
4. Lack of transparency.

As such, the ACCC made six recommendations to address the concerns it raised in the Ad Tech Report.

On 28 January 2021 the Australian Competition and Consumer Commission (ACCC) released its interim report for the Digital Advertising Services Inquiry. The interim report did not make any draft recommendations, but it did make clear that the ACCC is concerned about Google’s high market shares in each of the four markets analysed across the advertising technology services supply chain, and seeks feedback on a number of proposals aimed at addressing concerns about:

• low levels of competition in the supply of ad tech services;
• conflicts of interest and self-preferencing; and
• opacity in the supply chain.

The Interim Report also touched on an ongoing debate in the digital economy: to what extent are the policy goals of protecting competition between digital service providers and protecting consumer privacy in conflict?

Digital Advertising Service Inquiry (The ‘AdTech Report’)  (Final Report published 28 Sept 2021)

In the AdTech Report, the ACCC concludes that Google is dominant across the Ad Tech supply chain and that this creates significant problems for competition, advertisers, publishers (and ultimately, consumers).

The ACCC’s Competition Concerns
The Report says that the ACCC has the following key concerns:

1. (Googles) Use of first party data
2. Google’s vertical integration leads to conflicts of interest
3. Self-preferencing
4. Lack of transparency.

Ad Tech Report Recommendations

The Commission considered that enforcement action under the Competition & Consumer Act 2010 (presumably including, the s.46 Misuse of Market Power provisions) was insufficient to address these issues in a timely manner and instead argues that additional ex-ante regulation would be preferable.
As such, the ACCC made six recommendations to address the concerns it raised in the Ad Tech Report. These include:

1. Google should amend its public material to illustrate how it uses first-party data to provide ad tech services: this would apply to consumer terms of service, privacy policy as well as B2B materials.
2. The ACCC should have the power to develop sector specific rules to address conflicts of interest and competition issues: these rules would apply only to providers that meet criteria related to their market power or strategic position. Rules would be devised in consultation with industry and would need to be proportionate to the risks faced.
3. The power to introduce sector specific rules would be likely to allow the ACCC to address competition issues caused by an Ad Tech provider’s “data advantage”. These measures should apply where the data advantage arises from the Ad Tech provider’s market power and/or strategic position and the data advantage increases the Ad Tech provider’s market power. This recommendation will need to be balanced against consumer privacy considerations.
4. Industry should establish standards to require Ad Tech Providers to publish average fees and “take rates” for Ad Tech services, and to enable verification of DSP services.
5. Google should provide publishers with additional information about the operation and outcomes of its publisher ad server auctions.
6. The ACCC should be given powers to develop and enforce rules to improve transparency across the Ad Tech supply chain.

Note: Links provided to ADMA’s submissions in response to both the Issues Paper  and the Interim Report

Other Key Inquiries / Reviews

Consumer Data Rights Rules - amended

Following the Treasurer’s consent, the Competition and Consumer (Consumer Data Right) Rules 2020 (the Rules) commenced on 6 February 2020. This is a key development in progressing Consumer Data Right.

The Rules set the foundational framework for how Consumer Data Right operates in the banking sector. Under the Rules, the four major banks are required to share product reference data in a standardised format, facilitating better product comparisons.

On 19 February 2021 the ACCC has made the Competition and Consumer (Consumer Data Right) Amendment Rules (No. 3) 2020 (the Amended Rules).
The Amended Rules and accompanying Explanatory Statement are available on the Federal Register of Legislation.

These changes intend to expand the Consumer Data Right Rules (Rules) to allow greater participation in Consumer Data Right, by:

• expanding the type of consumers who can use Consumer Data Right to include more business customers
• improving consumer experience through greater flexibility for participants’ business models.

From 1 November 2021, the major banks will enable business consumers to share their data with accredited data recipients.

These changes build on the amendments made to the Rules, which commenced on 2 October 2020, to allow accredited intermediaries to collect Consumer Data Right data on behalf of an accredited data recipient.

An infographic with a simplified overview of the Consumer Data Right implementation timetable, the Privacy Impact Assessment (PIA) for version 2 of the Rules and the ACCC’s response to the PIA can each be found here

News Media Bargaining Code: passed

25 February 2021 - Australia passed the News Media Bargaining Code that requires Google and Facebook to pay for news share on the platform. The law has attracted a lot of international interest as Google and Facebook took unprecedented actions in their protests to the law.

Google had local campaigns outlining their position however after discussion between the treasurer and Google (US) Google entered into negotiations with many of the large news organisations.  Facebook took a different approach and banned news content on its platform in Australia. The implementation of this action accidentally saw the wiping of  pages operated by charities, government organisations and state health departments at a critical stage of the coronavirus pandemic. Facebook issued an apology for this and entered into further discussions with the Treasurer.

The law was ultimately passed after an 11th-hour amendment that also resulted in Facebook agreeing to re-enable Australians ability to share news content (described as re-friending Australia by one media outlet). Facebook shared a blog post explaining its decisions and position. Meanwhile, UK politicians continued to side with Australia  expressing fury with Facebook. It implied that Facebook overplayed its hand, and more social media regulation is now likely. There are mixed reviews on how this is working (depending predominantly on whether or not the media entity has been able to negotiate with the Major platforms or not.

Digital Platforms Service Inquiry  Report on general online retail marketplaces ( Issues Paper published  July 2021)

The ACCC is examining competition and consumer concerns with general online retail marketplaces such as eBay Australia, Amazon Australia, Kogan and Catch.com.au as part of its inquiry into digital platform services in Australia. The ACCC will examine the marketplaces and their relationships with third-party sellers and consumers, as well as how these marketplaces affect competition in Australian markets.

Note: ADMA did not submit a response to this Issues Paper, but will engage with the consultation when the Interim Report is out in March 2022.