Oracle slams Google in inquiry submission

US corporation Oracle has branded Google’s adtech advertising service as anticompetitive and monopolistic in a scathing submission to Australia’s competition regulator.

Google ‘restricts advertisers’ from using non-Google adtech providers. Picture: AFP

US corporation Oracle has branded Google’s adtech advertising service as anticompetitive and monopolistic in a scathing submission to Australia’s competition regulator.

In February, the Australian Competition & Consumer Commission launched an inquiry into digital advertising services and platforms with Treasurer John Frydenberg saying the government wanted to build a regulatory framework that better protected consumers and addressed bargaining power imbalances between digital platforms and media companies.

The ACCC is due to deliver an interim report by the end of the year and a final report by August 31 next year.

The ACCC inquiry is attracting international interest, with Californian-based Oracle writing a 25-page submission.

“We have provided evidence in this submission of the anticompetitive behaviour of Google in the supply of open display adtech services, largely considered from the perspective of advertisers,” the Oracle submission says.

“As we demonstrate, Google restricts advertisers from using non-Google adtech providers, either by directly prohibiting the use of such providers or by restricting access to data, which forecloses competition in important ways.”

Oracle says Google goes to great lengths to inhibit transparency by limiting the ability of advertisers to independently assess the effectiveness of their advertising. It says Google can sell low quality Google owned and operated ad inventory at a premium.

“As a consequence of Google’s actions, advertisers pay more than they should, and publishers receive less than they should. Regulatory intervention is required from the ACCC to address these market failures.”

It says Google prevents advertisers from using preferred adtech providers and advertisers can’t access the data they need to optimise their advertising expenditure.

“This significant cost is passed on to consumers in the form of higher prices,” it says.

The submission also homes in on the plight of publishers. It says a study by the Incorporated Society of British Advertisers found that about 50 per cent of money advertisers spend with online publishers is paid to adtech providers and ad agencies, and is not received by online publishers.

It says Google can engage in anticompetitive practices because of the vast quantities of consumer data that it had acquired in breach of the Competition and Consumer Act.

It says Google’s action in 2015 to withdraw YouTube from Google AdX meant that advertisers were excluded from using any demand side platform other than Google’s.

It says YouTube’s lack of transparency and feedback made advertising on YouTube riskier. It says that in 2017 major brands including Verizon and Walmart pulled their ads after they appeared next to videos promoting extremist views and hate speech.

“In 2019, brands such as Nestle stopped buying ads on YouTube after their ads appeared on children’s videos where paedophiles had infiltrated the comments sections,” the submission says.

It says no information is provided to advertisers as to the sources of Google data or its accuracy. They cannot determine if the data is of value.

“This contrasts with the approach adopted by non-Google data brokers, such as ODC.”

It says Google is proposing changes to its Chrome browser that will effectively stop advertisers from using non-Google adtech services to independently perform functions like targeting, conversion tracking and frequency capping in Chrome.

Oracle has proved a thorn in the side of Google, taking on Google in various venues. It has made several submissions to the ACCC over two years, including to its Digital Platforms Inquiry.

Oracle does have a motive. It is involved in a long-running $US8.8bn ($12.7bn) lawsuit claiming Google built its Android operating system without obtaining the licences needed to use the Java programming language. The litigation began in 2012.

Google says consumers typically share data with many firms, so it is unlikely that any one firm has unique access to user data.

Oracle’s submission is among 29 to this inquiry so far. The Australian Association of National Advertisers, Commercial Radio Australia, Free TV, International Centre for Law and Economics, Music Rights Australia, SBS, Verizon Media along with Microsoft, Facebook and Google also have tendered submissions.