Matthew Miller
Feb 28, 2019

Australian watchdog: Give us more opinions on duopoly power

The Australian Competition and Consumer Commission wants more input as it mulls over increasing oversight of the digital ad business.

Rod Sims
Rod Sims

The ACCC (Australian Competition and Consumer Commission) says it has not yet reached a conclusion in its ongoing inquiry into digital advertising and wants more feedback about its preliminary recommendations.

In a speech to the AANA (Australian Association of National Advertisers) last night, Rod Sims, ACCC chair, said his organisation is continuing to examine the ad-tech supply chain to better understand how it works and how it impacts advertisers. "In this we would like the advertising industry’s help, as it is clear these are issues that require close examination," Sims said.

The inquiry, first announced in December 2017, is looking into whether online platforms—namely Facebook and Google—are exercising their market power to the detriment of consumers, media content creators and advertisers. 

The ACCC took in briefs from a wide range of relevant companies and parties through May last year and then issued a set of preliminary recommendations in December.  

At the time it issued those recommendations, the ACCC said it would welcome feedback through February 15, so last night's call for more input implies an extension of that deadline. However, Sims did not indicate a change to the timeline for the ACCC to deliver its final report and recommendations, slated for June.

Related in today's news: Facebook launches $3.6 million Australian news project

“Being big is not a sin," Sims said in the speech. "Australian competition law does not prohibit a business from possessing substantial market power or using its efficiencies or skills to outperform its rivals. But the dominance held by Google and Facebook in certain markets, plus the incentives they face, does mean their conduct should be subject to particular scrutiny to identify whether it is creating competitive or consumer harm.”

An ACCC statement issued yesterday noted that for every dollar spent on digital advertising in Australia, more than 68 cents goes to Google and Facebook and called the pricing of intermediary services "opaque". The commission is exploring whether there is sufficient transparency about the ‘cut’ taken by intermediaries, whether this lack of clarity "disadvantages online media businesses' ability to monetise their content", and whether verification mechanisms are sufficient when Google and Facebook are "acting as the scorekeeper in a game where they are a player".

The preliminary ACCC recommendations issued in December called for increased regulation including oversight of mergers, monitoring of advertising and news practices, and enhanced privacy measures. For example, the ACCC called for giving the government broad powers to police the way digital platforms rank and present both advertising and journalistic content, and recommended significant changes to privacy regulations, akin to the regime now in place in Europe.

In addition, the ACCC said at the time it was still considering whether the government should monitor pricing practices by requiring companies to provide information on the median price charged for each product offered, how that price is determined, the revenue received for each product or service, and any discounts, rebates or other incentives offered.

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