Google has been accused of harming consumers by pushing up the prices of goods due to its dominance in online advertising.
Australia's competition regulator - the ACCC - on Tuesday released a report finding the tech giant was involved in 'more than 90 per cent of ad impressions' sold through advertising technology software known as ad tech.
Google's dominance allows it to charge higher prices for the adverts and this in turn pushes up the cost of the products, the ACCC said.
Google has been accused of harming consumers by pushing up the prices of goods due to its dominance in online advertising. Pictured: Google Headquarters in California
'We are concerned that the lack of competition has likely led to higher ad tech fees,' said chairman Rod Sims.
'An inefficient ad tech industry means higher costs for both publishers and advertisers, which is likely to reduce the quality or quantity of online content and ultimately results in consumers paying more for advertised goods.'
Ad tech analyses, manages, and delivers advertisements. Google, Facebook and Amazon are the best-known players in the $170billion industry.
The report said Google has achieved dominance in ad tech partly due to its vast access to consumer data and its take-over of other companies including DoubleClick in 2007, AdMob in 2009, and YouTube in 2006.
'The report finds that Google has used its position to preference its own services and shield them from competition,' the ACCC said.
'For example, Google prevents rival ad tech services from accessing ads on YouTube, providing its own ad tech services with an important advantage'.
The ACCC also raised concerns that Google's dominance means it often provides services for advertisers and publishers at the same time, potentially causing a conflict of interest.
Google Australia CEO Mel Silva
'Google's activities across the supply chain also mean that, in a single transaction, Google can act on behalf of both the advertiser (the buyer) and the publisher (the seller) and operate the ad exchange connecting these two parties,' the report said.
'As the interests of these parties do not align, this creates conflicts of interest for Google which can harm both advertisers and publishers.'
The ACCC also accused Google of being secretive with how it operates its technology.
'Many of the concerns we identified in the ad tech supply chain are similar to concerns in other digital platform markets, such as online search, social media and app marketplaces.
'These markets are also dominated by one or two key providers, which benefit from vertical integration, leading to significant competition concerns. In many cases these are compounded by a lack of transparency,' the report said.
Mr Sims said he wants new rules to tackle Google's market power and level the playing field for other companies.
'New regulatory solutions are needed to address Google's dominance and to restore competition to the ad tech sector for the benefit of businesses and consumers,' he said.
Google released a statement which did not directly address the concerns raised in the ACCC report.
'As one of the many advertising technology providers in Australia, we will continue to work collaboratively with industry and regulators to support a healthy ads ecosystem,' it said.
A Google source said its advertising fees are similar to industry averages and that if they were too high advertisers and publishers would go elsewhere.
The source also said Google faces competition from 'closed channels' such as Facebook, Tik Tok and Twitter which sell their space directly to advertisers.
Closed channels make up 57 per cent of total display advertising spend, the ACCC said.
In April, Daily Mail sued Google in the US District Court in New York for allegedly building a dominant position in the ad tech industry illegally and forcing companies to use its services.
Ad tech includes the software that publishers use to sell ad space and the marketplace, referred to as an exchange, where millions of ad slots are sold in auctions each day.
Google exploits its control of those ad tech tools by forcing publishers to use its own ad server, which it has tied to its own exchange, in a bid to stamp out competition from rival exchanges, the lawsuit alleges.
According to the complaint, Google makes it difficult for publishers to compare prices among different exchanges, reduces the number of exchanges that can submit bids for ad space and even uses bids offered by rival exchanges to set its own bids.
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