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ACCC officially begins ad tech inquiry, along with further five year inquiry into digital platforms

The Australian Competition and Consumer Commission’s (ACCC) inquiry into the ad tech supply chain is officially underway, with Treasurer Josh Frydenberg directing the watchdog to commence the 18 month inquiry alongside a further, five year inquiry that will continue to investigate and put pressure on digital platforms including Facebook and Google.

The second inquiry into digital platforms, to run from 2020 to 2025, is much lengthier than the initial 18 month inquiry which began in 2017 and culminated in the ACCC’s 623-page report released last July.

Frydenberg commented on last week’s directions over the weekend

The ad tech inquiry into the “black box” and “opaque” media buying process was one of the ACCC’s most notable recommendations in that report, and was ultimately supported by the government when it responded in December. As part of that response, the Morrison government committed $27m over four years to establish and resource an ACCC digital platforms branch, which will carry out such inquiries.

“The ad-tech inquiry will focus on technologies facilitating the supply of online advertising to Australian consumers. These technologies gather information about consumers and use it to target them with highly personalised advertising,” Frydenberg said in a statement released over the weekend about the ACCC directions.

“Digital technologies are going to be an increasingly important part of our economic and social landscape. Our reforms will ensure we get the balance right and position Australia as a leading digital economy.”

Despite the scrutiny their agencies will now face, both holding group and independent agency bosses told Mumbrella they widely supported the inquiry going ahead, agreeing with both the ACCC and government that intervention will improve trust and transparency.

The final report for the ad tech inquiry will be delivered by 31 August 2021, with an interim report due by 31 December. An issues paper to be published next month will provide further details on the inquiry’s areas of focus, but the ACCC’s initial scope is already comprehensive.

One of two directions issued by Frydenberg to the ACCC last week

It will consider the competitiveness and efficiency of the supply chain, concentration of power, auction and bidding processes, impact of mergers and acquisitions, suppliers’ behaviour and corporate structures, contractual relationships between suppliers and customers, and the distribution of expenditure between publishers, digital ad tech service providers and advertising agencies.

The second inquiry will maintain existing pressure on digital platforms for a further five years, with a final report to be provided by 31 March 2025. An initial interim report will be published by 30 September this year, followed by subsequent interim reports every six months until the 2025 end date.

The ACCC will continue to investigate both Facebook and Google as part of the new inquiries

The ACCC will pay particular attention to search engines like Google, social media platforms like Facebook, online private messaging services, digital content aggregators, media referral services, and electronic marketplaces. The inquiry will also capture data practices of both digital platforms and data brokers.

Facebook told Mumbrella it has been “proactive” in its engagement with the ACCC and will continue to work with the watchdog.

“We continue to support and work towards smart regulation and will work with the ACCC and the government to inform clear measures that support innovation, strengthen competition and protect Australians and their information,” director of policy across Australia and New Zealand, Mia Garlick, said.

“It is important we get this right as these decisions will impact more than 16 million Australians that use our services every month to connect, grow their business and share ideas.”

Google gave a very similar statement, with a spokesperson saying: “We have engaged closely with the ACCC and the government throughout the Digital Platforms Inquiry process and will continue to do so in 2020, including on focus areas such as privacy, ad tech and our work with publishers.”

These two further ACCC inquiries will, according to the government, contribute to a regulatory framework that “better protects and informs Australian consumers, addresses bargaining power imbalances between digital platforms and media companies, and ensures privacy settings remain appropriate in the digital age”.

In its December response to the ACCC’s final report from the last inquiry, the Coalition also supported a voluntary code of conduct, reformed media regulation to cover both online and offline companies, increased penalties for breaches of the Privacy Act, a review of the legislation, and a binding online privacy code.

It chose not to support a mandatory ACMA take-down code to assist with copyright enforcement on digital platforms. The recommendation for a reformed tax system to encourage philanthropic support for journalism was also rejected.

Mumbrella has contacted Google and Facebook for comment.

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