Bill Could Force Google to Break up Ad Business
Google could be forced to break up its ad business if a bill introduced Thursday (May 19) by Sen. Mike Lee, R-Utah, becomes law.
As The Wall Street Journal reported, Lee’s Competition and Transparency in Digital Advertising Act is designed to root out conflicts of interest in the ad technology sector. The bill has bipartisan support, with Sens. Ted Cruz, R-Texas, Amy Klobuchar, D-Minn., and Richard Blumenthal, D-Conn., signed on as co-sponsors.
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The Journal called the bill one of the most aggressive pieces of legislation aimed at curbing the power of Big Tech firms. It bars any company that processes more than $20 billion in digital ad transactions a year from taking part in more than one part of the digital advertising ecosystem.
If approved, the law would have a direct impact on Google, the key player in every step of the online ad buying/selling processes, as it has tools that let companies purchase and sell ads, along with ad exchanges. The bill wouldn’t allow Google to be a part of all those businesses, forcing the company to divest large portions of its multi-billion-dollar digital ad business.
“When you have Google simultaneously serving as a seller and a buyer and running an exchange, that gives them an unfair, undue advantage in the marketplace, one that doesn’t necessarily reflect the value they are providing,” Lee told the Journal. “When a company can wear all these hats simultaneously, it can engage in conduct that harms everyone.”
A spokesperson for Google responded by saying that breaking up the company’s ad tools would “hurt publishers and advertisers, lower ad quality and create new privacy risks. And at a time of heightened inflation, it would handicap small businesses looking for easy and effective ways to grow online.”
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The bill is one of many pieces of pending legislation aimed at limiting the power of Google and other Big Tech companies.
Among them is the American Innovation and Choice Online Act, aimed at preventing companies like Google and Amazon from favoring their own services over others. Competitors and businesses have routinely complained these companies systematically favored their own products when consumers use the search engine or a marketplace.
There’s also the Open App Markets Act, aimed at bringing more competition to app stores, something that would chiefly impact Google as well as Apple. This bill would prevent the tech giants from requiring developers to use in-app payment systems as a condition of gaining distribution on their app stores.
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