Google Faces Strict Regulation over Dominating Digital Advertising in Australia

Google’s digital advertising dominance is facing strict regulation by the Australian Competition and Consumer Commission (ACCC). The ACCC, on Thursday, published the interim report from its landmark Digital Advertising Services Inquiry.

It found that Google controls 90 per cent of the digital display advertising sector when measured via impressions, which is worth 3.4 billion Australian dollars ($2.6 billion) and 70 per cent of the revenue.

It warned of Google’s “ability and incentive to favour its own related business interests’’ and raised issues about the technology giant’s impacts on publishers, advertisers and consumers.

“Effective competition in the Ad-Tech industry is important for Australian consumers.

“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,’’ the report said.

“If publishers receive too little revenue for their advertising inventory, consumers will face a reduction in the quality and variety of online content.

“While there are a large number of Ad-Tech providers across the supply chain, Google is by far the largest provider of each of the four key services considered.’’

In 2020, the government directed the ACCC to develop a world-first media code for technology giants including Google and Facebook that will force them to pay for news content.

Despite threats from Google that they could leave Australia as a result of the media code, Treasurer Josh Frydenberg, said the government was committed to ensuring that regulation kept “pace with the changes being driven by digital platforms’’.

He said digital platforms had “fundamentally changed the way that media content is produced, distributed and consumed.’’

“While this is an interim report, the government notes the ACCC’s concerns over competitiveness and the continued dominance of tech giants,’’ Frydenberg told News Corp Australia.

“The government looks forward to receiving the final report later this year as we continue delivering reforms to better protect and inform Australian consumers and businesses in the digital age.’’