Tag: Australian Competition and Consumer Commission

Australia – Alan Joyce, the current chief executive officer of Qantas has announced that he is stepping down from his role fom the company. This comes after the Australian flag carrier came under pressure from legal proceedings made by the Australian Competition and Consumer Commission (ACCC) over its alleged misleading advertising of tickets.

According to a press statement from Qantas, Joyce will be replaced by Vanessa Hudson, who now takes the role of managing director and group CEO for the airline. This takes effect on September 6 this year.

In a statement by Joyce, he said that the focus on Qantas and events of the past make it clear to him that the company needs to move ahead with its renewal as a priority.

“The best thing I can do under these circumstances is to bring forward my retirement and hand over to Vanessa and the new management team now, knowing they will do an excellent job,” he said.

He added, “There is a lot I am proud of over my 22 years at Qantas, including the past 15 years as CEO. There have been many ups and downs, and there is clearly much work still to be done, especially to make sure we always deliver for our customers. But I leave knowing that the company is fundamentally strong and has a bright future.”

Meanwhile, Richard Goyder, chairman at Qantas, commented, “Alan has always had the best interests of Qantas front and centre, and today shows that. On behalf of the Board, we sincerely thank him for his leadership through some enormous challenges and for thinking well-ahead on opportunities like ultra long-haul travel.”

He added, “This transition comes at what is obviously a challenging time for Qantas and its people. We have an important job to do in restoring the public’s confidence in the kind of company we are, and that’s what the Board is focused on, and what the management under Vanessa’s leadership will do.”

Last week, the ACCC filed an action against Qantas at the Federal Court of Australia over the airline’s misleading conduct of advertising tickets for more than 8,000 flights that it had already cancelled but not removed from sale.

According to the commission, Qantas kept selling tickets on its website for an average of more than two weeks, and in some cases for up to 47 days, after the cancellation of the flights.

It also alleges that for about 70% of cancelled flights, Qantas either continued to sell tickets for the flight on its website for two days or more, or delayed informing existing ticketholders that their flight was cancelled for two days or more, or both.

Speaking on their investigation, ACCC Chair Gina Cass-Gottlie said, “We allege that Qantas’ conduct in continuing to sell tickets to cancelled flights, and not updating ticketholders about cancelled flights, left customers with less time to make alternative arrangements and may have led to them paying higher prices to fly at a particular time not knowing that flight had already been cancelled.”

In response, Qantas previously said that during the ACCC conducted the investigation, it was a time of unprecedented upheaval for the entire airline industry, and that they have always practiced a longstanding approach to managing cancellations for flights, with a focus on providing customers with rebooking options or refunds.

“All airlines were experiencing well-publicised issues from a very challenging restart, with ongoing border uncertainty, industry wide staff shortages and fleet availability causing a lot of disruption,” the company said back then.

Sydney, Australia – The Federal Court of Australia has ordered hotel search site Trivago in $44.7m in penalties, which according to proceedings from the Australian Competition and Consumer Commission (ACCC) shows that the platform has made misleading representations about hotel room rates on its website and in television advertising.

Trivago admitted that between December 2016 and September 2019 it received approximately $58m in cost-per-click fees from clicks on offers that were not the cheapest available offer for a given hotel, causing consumers to overpay hotel booking sites approximately $38m for rooms featured in those offers.

The Federal Court found in January 2020 that Trivago had breached the Australian Consumer Law by misleading consumers when representing that its website would quickly and easily help users identify the best deal or cheapest rates available for a given hotel.

Gina Cass-Gottlieb, chair at the ACCC, said, “One of the ACCC’s key priorities is to hold online businesses accountable for their representations to consumers and to ensure consumers are fully aware of the way these supposedly free services actually work and what influences the prices they display. The way Trivago displayed its recommendations when consumers were searching for a hotel room, meant consumers were misled into thinking they were getting a great hotel deal when that was not the case.”

She added, “Trivago also misled consumers by using strike-through prices which gave them the false impression that Trivago’s rates represented a saving when in fact they often compared a standard room with a luxury room at the same hotel.”

Cass-Gottlieb also said that said penalty sends a strong message not just to Trivago, but to other comparison websites, that they must not mislead consumers when making recommendations.

In August 2018 the ACCC instituted proceedings against Trivago and in January 2020, the Federal Court found Trivago had breached the Australian Consumer Law when it made misleading representations about hotel room rates on its website and television advertising.

In March 2020, Trivago appealed the Court’s decision. This was dismissed by the Full Federal Court in November 2020.

Sydney, Australia – The Australian Competition and Consumer Commission (ACCC) has released a report today that has raised concerns on the state of the advertising technology space in Australia, specifically tech giant Google’s dominance of the sector, which may potentially harm advertisers and publishers.

According to their report inquiry, Google has a dominant position in key parts of the adtech supply chain and estimates that more than 90% of ad impressions traded via the adtech supply chain passed through at least one Google service in 2020.

It is estimated that in Australia, at least 27% of advertiser spend on ads sold via the adtech supply chain was retained by adtech providers in 2020.

Furthermore, the report finds that Google has used its position to preference its own services and shield them from competition. For example, Google prevents rival adtech services from accessing ads on YouTube, providing its own adtech services with an important advantage. In addition, Google has also refused to participate in publisher-led header bidding, an industry innovation aimed at increasing competition for publishers’ inventory, and previously allowed its services to have a ‘last look’ opportunity to outbid rivals.

“Google has used its vertically integrated position to operate its adtech services in a way that has, over time, led to a less competitive adtech industry. This conduct has helped Google to establish and entrench its dominant position in the adtech supply chain,” Rod Sims, chair at ACCC, said.

Part of the tech giant’s dominance in the adtech sector are key acquisitions of several companies such as DoubleClick in 2007, AdMob in 2009, as well as YouTube in 2006. In addition, factors such as access to consumer and other data, access to exclusive inventory and integration across its adtech services cemented their dominance in the sector.

“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. As the interests of these parties do not align, this creates conflicts of interest for Google which can harm both advertisers and publishers,” Sims stated.

He added that the ACCC is concerned with Google’s adtech dominance, noting that the lack of competition has likely led to higher adtech fees. He further stated that an inefficient adtech 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.

“The ACCC is considering specific allegations against Google under existing competition laws. However new regulatory solutions are needed to address Google’s dominance and to restore competition to the adtech sector for the benefit of businesses and consumers. We recommend rules be considered to manage conflicts of interest, prevent anti-competitive self-preferencing, and ensure rival adtech providers can compete on their merits,” Sims continued.

They have also noted that many of the concerns they identified in the adtech 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.

“We have identified systemic competition concerns relating to conduct over many years and multiple adtech services, including conduct that harms rivals. Investigation and enforcement proceedings under general competition laws are not well suited to deal with these sorts of broad concerns, and can take too long if anti-competitive harm is to be prevented,” Sims concluded.

Google has access to a large volume and range of first-party data gathered through its customer-facing services, such as Search, Maps, and YouTube. The extent to which Google uses its first-party data to advantage its adtech businesses is not clear and is a source of confusion among industry stakeholders.

The report also recommends that under the proposed new sector-specific rules, the ACCC be given the power to develop and implement special measures to address competition issues caused by an adtech provider’s data advantage, such as data separation or data access requirements to address the competition risks that may arise from the use of first-party data.