According to The Wall Street Journal, a group of Senate Republicans and Democrats introduced a new bill on Thursday that could force Google and Facebook’s parent company, Meta, to spin off their online advertising businesses.
The Competition and Transparency in Digital Advertising Act, co-sponsored by Senators Mike Lee (R-UT), Ted Cruz (R-TX), Amy Klobuchar (D-MN), and Richard Blumenthal (D-CT), would prohibit companies that process more than $20 billion in digital ad transactions per year from operating more than one segment of the digital advertising ecosystem.
The restrictions would have a direct impact on Google, which antitrust watchdogs have long regarded as a vertical monopoly in display advertising. In testimony to the House Judiciary Committee in 2020, Omidyar Network advisor David Dinielli made the case directly to Congress. “Google — through its various ad tech tools — represents both suppliers and purchasers, and also conducts real-time auctions that match buyers and sellers and determine the price,” Dinielli explained. GOOGLE, WHICH TECH ANTITRUST HAWKS HAVE LONG SEEN AS A VERTICAL MONOPOLY IN DISPLAY ADVERTISING, WOULD BE DIRECTLY AFFECTED BY THE RESTRICTIONS.
When contacted for comment, Google spokesperson Julie Tarallo McAlister stated that the proposed legislation would ultimately harm users. “Google and many competitors’ advertising tools help American websites and apps fund their content, businesses grow, and users are protected from privacy risks and misleading ads,” Tarallo McAlister told The Verge on Thursday. “Breaking those tools would be detrimental to publishers and advertisers, reduce ad quality, and introduce new privacy risks.” And, at a time of rising inflation, it would be detrimental to small businesses seeking simple and effective ways to grow online.”
Meta, Facebook’s parent company, would almost certainly have to divest significant portions of its advertising operations as well. The measure would also impose new rules on smaller companies that process more than $5 billion in digital ads annually, such as providing pricing transparency and acting in the best interests of consumers.
