Background: Australia's competition watchdog, AKA the ACCC, has released a report that shows Google's advertising technology business is squashing competition. 

What happened:  In 2020, more than 90% of digital ads had passed through Google at least once. And the ACCC reckons it’s harming publishers, it’s harming advertisers and its even harming consumers - so pretty much everyone except Google itself. 

What else: The ACCC reckon that it’s all due to Google’s vertical integration in the ad space. They own publishers, ad tech platforms and advertisers. As a result, the ACCC wants more power to write some new regulations around how the ad tech sector should work in Australia. 

So what's the key learning?

💡Vertical integration is when a company owns each stage of its production process... rather than relying on 3rd party contractors or suppliers.

💡Let's see how it works in the chocolate industry:

• Raw materials are grown (ie cocoa)
• A manufacturer turns the cocoa into chocolate
• A wholesaler/distributor buys the chocolate from manufacturer
• A retailer buys from distributor
• A consumer buys from retailer

These roles are generally performed by separate companies. But if these parts of the supply chain were all performed by one company, it would be vertically integrated 

💡There is also a vertical integration for the ad tech industry - and Google owns it all. Since Google has its finger in all parts of the supply chain, it has a LOT of power to manipulate the pricing and exclude competitors.