Google, Facebook under the microscope as ACCC begins ad investigation

Australia's competition regulator has kicked off its investigation into advertising technology services by Google and Facebook.

The ACCC wants public or confidential submissions on the ad tech services industry by April 21. Picture: AFP

Australia's competition regulator has kicked off its investigation into advertising technology services by Google and Facebook by calling for information on the industry's practices and user experience, in the wake of its landmark digital platforms inquiry.

The Australian Competition & Consumer Commission’s inquiry will also focus on services provided by advertising and media agencies during the purchase and optimisation of digital display ads.

The regulator wants information on the various ad tech or agency services used to sell digital display ads and generate revenue, plus feedback on the experience with selling digital display ads. It wants to hear from any website or app owners that generate income by running digital display ads.

The launch of the inquiry comes as the ACCC conducts another investigation into how Google preferences its own and related businesses, and is interviewing international rivals as part of its probe into the digital giant.

ACCC's chairman Rod Sims last week interviewed the senior vice president of public policy for US-based business directory service Yelp, Luther Lowe, aimed at understanding the extent of Google's self-preferencing in Australia.

In a two-page document outlining its questions for ad hosts, the ACCC said its ad tech services inquiry will focus on four key issues: availability of information; completion throughout the ad tech supply chain; the role and use of data; and suppliers behaviour.

The ACCC wants to know if companies have enough information to make an informed decision about which ad tech company to choose when selling online display ads after concerns were raised during its digital platforms inquiry.

During the digital platforms inquiry, the ACCC said concerns were raised about the complexity and so-called “black box” nature of some parts of the digital display ad supply chain, which can result in a real or perceived lack of information about the price and quality of services provided.

The regulator also wants to know if ad tech companies could increase its prices, or reduce the quality of services, without losing business, and if there are alternative providers.

The ACCC also wants information on whether access to consumer data impacts a company's decision when selecting an ad tech company.

The Morrison government in December gave Google and Facebook the chance to work with media companies on a voluntary code of conduct to oversee commercial arrangements. Picture: AFP

"We are interested in how targeting capability, availability of consumer data, and terms and conditions regarding data collection and management, affect your choice of which ad tech companies and ad agencies to use," the ACCC said.

They also want information on whether large tech companies with multiple ad tech services have "the ability and incentive to bundle, tie, or preference their own services".

In response to the ACCC’s digital platforms inquiry, the Morrison government in December gave Google and Facebook the chance to work with media companies on a voluntary code of conduct to oversee commercial arrangements, in a bid to even out the playing field between traditional and new media.

If a voluntary code between the companies is not introduced, the government will seek to mandate one by November 2020.

The ACCC wants public or confidential submissions on the ad tech services industry by April 21.