ACCC seeks major reforms in digital advertising industry with release of Ad Tech Inquiry Final Report

By Jacqueline Downes, Robert Walker, Melissa Camp
ACCC Competition law Media, Advertising & Marketing Technology Telecommunications

A request for sector-specific powers 8 min read

The ACCC recently published the Final Report of its 18-month Digital Advertising Services Inquiry (Ad Tech Inquiry).

The Final Report examines the status of competition and innovation in the ad tech supply chain and its impact on publishers, advertisers and consumers. Consistent with global regulatory trends, the ACCC advocates for sector-specific regulation of the ad tech and digital platform industries.

Consultation on the proposed reforms will commence in early 2022 as part of the Digital Platform Services Inquiry.

Key takeaways

  • The Final Report focuses on the conduct of the largest integrated ad tech services provider: Google. The ACCC considers Google has a dominant position in key parts of the ad tech supply chain, underpinned by Google's access to large volumes of quality data.
  • In the ACCC's view, Google has used its dominant position to preference its own services, which over time has cumulatively reduced competition in the ad tech industry and reinforced Google's strength. The ACCC finds that Google's vertical integration also leads to conflicts of interest between Google's related businesses and between advertisers and publishers.
  • The ACCC considers the current tools available to it (eg investigation and enforcement action under existing competition laws) are insufficient to address these issues. The ACCC recommends that it be given powers to develop and enforce rules specific to the ad tech sector. Based on criteria linked to market power and/or strategic position, the rules would initially apply to Google and may capture other providers over time.
  • The ACCC plans to review whether specific rules, similar to those it is proposing be implemented in the ad tech sector, are required in digital platform markets more broadly. This will occur through the Digital Platform Services Inquiry (DPSI), which will publish its next report in September 2022. Consultation will commence in early 2022.

Background and the international approach

The Final Report is the latest development in the ACCC's focus on digital platforms, which commenced with the Digital Platforms Inquiry (DPI) in December 2017 and has seen the ACCC commence proceedings against Google1, develop the news media bargaining code of conduct, establish a specialist Digital Platforms Branch and commence the DPSI, a five-year inquiry into various digital platform services.

The ACCC is not alone among competition authorities in its focus on digital platforms and, more recently, ad tech. The UK Competition and Markets Authority, the European Commission (as well as national European competition authorities), the US Department of Justice, the Japan Fair Trade Commission and the Korea Fair Trade Commission are closely scrutinising digital platforms and developing regulatory regimes to address the competition, consumer and privacy issues they can raise.

The Ad Tech Inquiry was established following the DPI's recommendation. On 28 January 2021, the ACCC released its Interim Report expressing concern at the high level of concentration in the ad tech supply chain and sought feedback on a number of proposals. Following stakeholder consultation, the ACCC's Final Report calls for a significant expansion of ACCC powers to enable it to set and enforce rules specific to the ad tech industry.

Key findings


ACCC findings

Ad tech

Google's dominance in ad tech and self-preferencing

  • The ACCC found that Google is the dominant provider of ad tech services in Australia. In 2020, over 90% of impressions in the ad tech supply chain went through at least one Google service.
  • The ACCC found that Google's self-preferencing conduct (ie preferencing its owns products/services over alternatives) has had a cumulative effect of lessening competition and entrenching Google's dominant position in ad tech.
  • The ACCC is investigating specific self-preferencing allegations made during the Ad Tech Inquiry.

Vertical integration and conflicts of interest

  • The ACCC identified the conflicts of interest that can arise in vertically integrated ad tech supply chains:
    • conflicts of interest between related businesses (eg where an ad tech provider owns both a supply-side platform and publisher ad server); and
    • conflicts of interest between different customers (eg between publishers and advertisers).
  • The ACCC considered that currently there are no external constraints to prevent Google acting contrary to the interests of its customers and Google's internal processes and policies are insufficient to manage conflicts of interest.

Data advantage

  • The ACCC found that Google has access to large volumes of first-party data (collected from consumer-facing services) and third-party data (collected from third-party sites and apps).
  • The ACCC found that the volume and quality of data Google collects provides it with a competitive advantage in the supply of demand-side platform services.


  • The ACCC considered that Google's services lack transparency in three areas:
    • the operation of Google's ad tech auctions;
    • the prices and fees of Google's services; and
    • measuring the performance of Google's demand-side platforms.
  • The ACCC found that the lack of transparency impedes publishers' and advertisers' ability to compare and verify Google's ad tech services.

Ad agency services

Level of competition

  • The ACCC did not note any significant concerns about competition for ad agency services in Australia.
  • The ACCC found that ad agencies face competition from other ad agencies and consulting firms, and advertisers can easily switch ad agencies.

Potential conflicts of interest

  • The ACCC found two potential forms of conflicts of interest that may arise:
    • conflicts of interest relating to rebates, discounts or other incentives provided by publishers that may influence how an ad agency decides where to direct its client's money; and
    • conflicts of interest relating to ad agencies referring advertisers to other services owned or operated by other members of its holding group.  

Reform on the horizon

Ad tech sector-specific regulation

The Final Report is clear on the ACCC's view of the shortcomings of its existing toolkit: investigation and enforcement actions are targeted to specific breaches of law rather than systemic conduct and take lengthy periods to complete. Certain harms (eg conflicts of interest) also may not be addressed by existing competition laws. As a result, the ACCC is seeking the ability to create, monitor and enforce rules that would apply only to the ad tech sector.

Similar to the UK Competition and Market Authority's concept of 'strategic market status', the rules would apply to ad tech providers that meet criteria linked to their market power and/or strategic position in the ad tech supply chain. Initially, the rules would apply to Google, but other ad tech providers could be caught by them in the future if they meet the criteria.

If empowered to make ad tech sector-specific rules, the ACCC is proposing to set rules containing:

  • prohibitions on bundling/tying of services;
  • obligations to provide non-discriminatory access to ad tech services;
  • requirements to manage conflicts of interest;
  • transparency requirements; and
  • measures to address an ad tech provider's data advantage. The ACCC considers that data separation and data access requirements should be available measures, although acknowledges that data access requirements raise consumer privacy concerns under current privacy laws.

In addition, the ACCC is also seeking the power to develop and enforce rules to introduce transparency requirements that would apply to the whole ad tech supply chain. The ACCC is contemplating measures such as common transaction IDs and requirements to publish prices and take rates in a standard form.

The Final Report recommends several other measures to increase transparency in ad tech:

  • the ad tech industry (including Google) should establish voluntary standards to require providers to publish average fees and take rates for ad tech services and to enable full, independent verification of demand-side platforms. If this fails to achieve transparency or takes unreasonably long, the ACCC proposes to introduce and enforce transparency measures (see above).
  • Google should ensure that 'public material' directed at business users or consumers (eg its Terms of Service and Privacy Policy) clearly explains how it uses first-party data to provide ad tech services.
  • Google should provide publishers with additional information about the operation and outcomes of its publisher ad server actions.
Ad agency services

The Final Report does not make specific recommendations regarding ad agency services. Nonetheless, the ACCC provides guidance for ad agencies on what it considers best practice:

  • increasing transparency with clients about: rebate or discount arrangements and the way the agency interacts with other services in its holding group; and
  • incorporating principles from industry-led frameworks and checklists when managing and negotiating agency relationships with clients.
Digital platform markets sector-specific regulation

The Final Report notes the similarity of the issues raised in the Ad Tech Inquiry with the issues identified in the DPI and DPSI regarding online search, social media and app marketplaces. Introduction of digital platform specific rules would also align Australia with other countries that have introduced, or are planning to introduce, digital platform specific regulation (eg UK, EU, Japan, Korea). The ACCC will commence consultation on a broader regulatory framework to address issues across digital platform markets in early 2022 as part of the DPSI.