It’s no secret that the ad businesses of tech giants like Google and Meta have come under increasing scrutiny in recent years, with allegations of anticompetitive behaviour and market manipulation. Now, a bipartisan group of senators has introduced a new bill which seeks to break up the ad businesses of Google and Meta and impose restrictions on their operations.
Under the proposed AMERICA Act, large digital ad firms, handling over $20 billion in transactions, will need to divest their ad businesses if they own both an ad exchange and either a demand or supply-side platform. Similarly, medium-sized or larger companies handling over $5 billion in transactions would also have to ensure “best execution” for ad bids, be transparent, and provide fair access to technical capabilities and data. However, in cases where businesses run two sides of the market, “firewalls” must be established to minimise conflicts of interest and abuse.
Bipartisan senators show support for the bill
Although this is not the first time the US government has tried to limit the ad operations of tech giants like Google and Meta, the bipartisan support of the bill, including Senators Mike Lee, Amy Klobuchar, Ted Cruz, and Elizabeth Warren, increases its chances of passing. They accuse Google and Facebook of using their vast stores of user data to gain a dominant position in digital advertising and charging “monopoly rents” across the internet.
If the bill passes, it would have a significant financial impact on Google and Meta, which rely on ad sales as their primary sources of revenue. The companies may need to reconsider their broader strategies, as they use ad revenue to fund other projects. However, it remains unclear how much revenue these companies would lose through divestments.
“For too long, Google and Facebook have dominated the digital advertising marketplace at the expense of advertisers, publishers, and consumers. This legislation will put rules in place to do just that, restoring and protecting competition in digital advertising to create a more even playing field that will promote fairness and innovation moving forward,” says Senator Klobuchar.
2023-04-04 15:09:23