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ACCC boss Rod Sims is so fed up with Silicon Valley he wants the power to regulate it himself. That’s the takeaway from the the Australian Competition and Consumer Commission’s latest investigation into how big tech’s dominance is affecting Australians.

On Tuesday, the ACCC released its final report into the digital advertising services inquiry. In it, the ACCC argues that Google’s dominance in advertising technology (or “ad tech”) is probably harming Australian publishers, advertisers and consumers.

The report is the latest part of the ACCC’s behemoth Digital Platform Services inquiry, which has already produced critical reports on messaging and search services.

In its simplest form, ad tech is about connecting publishers who have space to advertise on their website or app with advertisers. These arrangements are typically worked out at digital auctions — split-second automated sales that figure out which advertiser will pay the most to show their ad to a specific user — completed every time a user goes to view a digital property where advertising is sold.

This is primarily done through third-party platforms which connect the two parties and draw a fee for doing so. It’s a highly complicated and opaque industry that forms one of the major business models of internet publishing.

In the ACCC’s understanding, Australian ad tech is comprehensively dominated by Google. The report estimates more than 90% of ad impressions go through at least one of the company’s services in a $9.5 billion Australian industry. The tech giant has been able to create this stranglehold on the industry through its involvement in all parts of the supply chain: through different services, Google is able to act on behalf of the publisher, the advertiser and the services in between — and sometimes a combination of the three. 

“As the interests of these parties do not align, this creates conflicts of interest for Google which can harm both advertisers and publisher,” Sims said.

A number of acquisitions by the company over the past 15 years, the report said, has helped it shore up its position as the undisputed number one. 

Google’s complete dominance combined with self-dealing through its many services allows the company to give itself preferential treatment and protect them against competition, the ACCC alleges. This, in turn, hurts the rest of us because it means Australians are likely spending more on advertising and getting worse services. 

Google, for their part, deny this characterisation: “Google’s digital advertising technology services are delivering benefits for businesses and consumers – helping publishers fund their content, enabling small businesses to reach customers and grow, and protecting people online from bad ad practices.”

They point to a PwC report that finds that Google’s ad tech supports more than 15,000 jobs and adds $2.45 billion to the Australian economy. (Of course, the technology’s benefit isn’t impugned by the ACCC. Their claim is that there would be a greater benefit if the market was more competitive).

The ad tech inquiry hits many of the same issues as previous reports, something that Sims points out himself: “Many of the concerns we identified in the ad tech supply chain are similar to concerns in other digital platform markets, such as online search, social media and app marketplaces. These markets are also dominated by one or two key providers, which benefit from vertical integration, leading to significant competition concerns. In many cases these are compounded by a lack of transparency.”

The elephant in the room of the report is Google’s big project in the ad tech space. The company is set to introduce a new type of tracking protocol (called “FLoC”, replacing cookies) in its products in 2022 that they claim will help protect the privacy of users. Gizmodo’s ad tech journalist Shoshana Wodinsky wrote that critics of the new scheme claim FLoC “is actually a shittily veiled attempt to kill off part of the digital ad market while controlling everything built upon its ashes”.

Essentially, if things go the way that Google wants, they might be somehow an even better market position in the not-too-distant future. 

While hinting at specific forthcoming attempts to prosecute Google’s anti-competitive behaviour, the ACCC report calls for a wider, systemic response to deal with the ad tech industry. The report has a handful of recommendations including encouraging industry standard transparency measures and asking Google to clarify ambiguous language that encourages a perception that it is not using data from its services like Gmail and Search for targeting advertising for third-party apps and websites.

The centrepiece of the report is an ask that goes beyond recommendations in the ACCC’s previous reports: the competition watchdog wants the power to create regulations for the industry, specifically Google. The report recommends giving the ACCC the ability to prohibit Google from using their first party data to assist their third party ad services, one of their advantages that they could have but choose not to at the moment; or to allow other companies to access that data. It’s not quite breaking up big tech, but it’s getting close. 

Asking the federal government for the ability to determine their own regulations is a big ask, and the report acknowledges this. “In this report, we have gone further than in previous ACCC inquiry reports and have recommended that the ACCC, or another regulator, be empowered to develop sector specific rules to deal with these concerns in relation to ad tech,” it reads.

But after years of dealing with different industries dominated by big tech, it’s clear that Rod Sims and the ACCC has seen a pattern of behaviour in the past and foresees that things are only going to get worse. The ACCC’s ad tech report is a signal that the consumer watchdog is taking the gloves off for their fight with Google and the rest of big tech.