Australia: Digital Advertising

Latest Developments

In September 2021, the ACCC released its final report as part of its inquiry into the markets for the supply of AdTech services and ad agency services (AdTech Report).

In November 2022, a report on proposed regulatory reforms to address competition and consumer issues that arise in relation to digital platforms was released (Reform Report).

Summary

In the AdTech Report, the ACCC concluded that one company in particular was dominant across the AdTech supply chain, creating significant problems for competition, advertisers, publishers (and ultimately, consumers).

It considered that enforcement action under the Competition and Consumer Act 2010 (Cth) was insufficient to address this issue in a timely manner and instead argued that additional ex-ante regulation would be preferable, including:

Empowering the ACCC to:

• Develop sector-specific rules to address conflicts of interest and competition issues applying only to providers that meet criteria related to their market power or strategic position. If such a provision was implemented, rules would be devised in consultation with industry and would need to be proportionate to the risks faced;
• Introduce sector specific rules to allow the ACCC to address competition issues caused by an AdTech provider’s “data advantage”. These measures should apply where the data advantage arises from the AdTech provider’s market power and/or strategic position and the data advantage increases the AdTech provider’s market power;
• Develop and enforce rules to improve transparency across the AdTech supply chain; and
• Requiring the industry to establish standards to require AdTech providers to publish average fees and “take rates” for AdTech services, and to enable verification of DSP services.

The ACCC also stressed the need for regulatory alignment with other jurisdictions in relation to digital platforms more broadly. To this end, the AdTech Report highlighted the work being undertaken by the UK Competition & Markets Authority, the European Union, Japan and the United States.

In the Reform Report, the ACCC recommended introducing reforms to combat scams, harmful apps, fake reviews, inadequate dispute resolution processes, and anti-competitive conduct and introduce stronger consumer safeguards, including expanding the scope of the unfair terms regime and introducing service-specific codes.

As part of the latest Digital Platform Services report, released on 28 April 2023 (Interim Report Six), the ACCC considered potential regulatory changes in respect of social media services. The ACCC made four key recommendations including:

• Economy-wide consumer measures such as a prohibition against unfair trading practices and strengthening of the unfair contract terms laws;
• Digital platform specific consumer measures to protect users of digital platforms including mandatory processes to prevent and remove scams, harmful apps and fake reviews, mandatory internal dispute resolution standards, and access to an independent Digital Ombuds Scheme;
• Additional competition measures for digital platforms to protect and promote competition in markets for digital platform services. These additional measures should be implemented through a new power to make mandatory codes of conduct for ‘designated’ digital platforms; and
• That the mandatory service-specific codes for ‘designated’ digital platforms recommended above should support targeted obligations based legislated principles to address issues such as a lack of transparency and impediments to consumer switching. 

How could it be relevant for you?

Companies providing or using AdTech or social media services or some other form of digital platform or software-as-a-service should be aware of looming reforms, which may include those proposed by the ACCC and set out in the Report referred to in chapter 4.

Next steps

The ACCC was due to release its seventh interim report on 30 September 2023 as part of the Digital Platform Services Inquiry and will likely propose further reforms in relation to the expanding ecosystem of digital platform providers. The seventh interim report is expected to be published soon. Further changes are also proposed to digital advertising in the Report relating to the Privacy Act (referred to in chapter 4).

*Information is accurate up to 27 November 2023