TV advertising makers are facing mounting pressure to lower their prices for advertisers.
The ACCC has accused ad networks of using the system to artificially increase the cost of ad spots and advertising.
In its report, the regulator said ad networks used a “robust” price-setting system that included “significant variation in the cost-per-spots that were charged”.
The regulator’s report is the latest in a series of investigations into the system.
The regulator said: “It is difficult to determine how many advertisers would have paid more had they been charged the appropriate price.”
The ACCC said it was not aware of any other ad network that had been penalised by the regulator.
Its report found ad networks were using the pricing system to raise advertising revenue to “unreasonable levels” without the consumer’s knowledge or consent.
The regulator has set up a $10m fund to help companies and organisations affected by the cost system.
The fund has been established by the Competition Bureau to help people affected by price gouging.
The ACCCs investigation has highlighted how price gougers were able to abuse the system, particularly targeting low-income consumers.
Advertisers were charged fees to appear in advertising spots that were advertised for $10 or less.
Some companies, including Vodafone, also charged fees for their own ads.
The watchdog said the ads were advertised by ad networks that “did not meet their advertised prices”.
The watchdog also found that ad networks charged businesses an “undue premium” for their services, often at “unreasonably high” prices.
Advertising costs are “unduly high” for consumers, the ACCC warned.
When companies have to pay to appear as advertisements in their ad networks, they often charge them more than other advertisers, “where the costs of providing the advertisement are relatively insignificant”.
The watchdog’s report also found the advertising costs were being artificially inflated by the use of the price-matching system.
The industry said it could not comment on the ACCCs report, because the regulator had not yet issued its report.
Industry body ACCC says it is investigating whether the pricing of TV adverts is unfair, unfair to consumers and unfair to ad operators.
Consumer groups said the ACCCA’s investigation was another step towards the government’s commitment to a fairer and more affordable television advertising.
Consumer groups urged the ACC to hold the broadcasters to account and set “prices for Australians” on the same terms as other Australian businesses.
Topics:broadcasting,broadcasting-broadcasting—television,advertisers,broadcast-media,industry,consumer-protection,consumerism,law-crime-and-justice,consumer,business-economics-and -business-environment,internet-technology,finance,technology,australiaFirst posted April 25, 2019 16:47:38Contact Greg Stacey