What you need to know
- A bipartisan group of U.S. senators wants to rein in Google’s dominance in the digital advertising market.
- This week, legislators may introduce a new bill aimed at Big Tech’s online advertising business.
- If the bill becomes law, Google and other tech giants will be forced to sell parts of their ad operations.
Google’s dominance in the digital advertising market has often been the target of various antitrust probes both in the United States and abroad, and a new bill set to be introduced as soon as this week could loosen its grip on the murky world of online ads.
Citing people familiar with the matter, Bloomberg reports that a bipartisan group of U.S. senators plans to introduce new legislation aimed at breaking the stranglehold Google and other tech giants have on the digital ad market. The bill could arrive later this week.
Senator Mike Lee of Utah is said to be leading the effort to limit tech companies’ control over various aspects of online advertising. As a result, companies with more than $20 billion in digital ad revenue will be barred from acting as brokers for buyers or sellers of online ads while also controlling the exchange on which ad space is traded.
This means that Google will be forced to sell off parts of its digital ad business. The bill appears to be aimed at Google at first glance, but it will also prohibit other tech behemoths, such as Meta and Amazon, from controlling multiple parts of the digital ad supply chain.
In addition, companies with more than $5 billion in digital ad revenue will be legally required to act solely for the benefit of their customers, much like how a financial adviser acts in their clients’ best interests. The legislation will also require companies to increase transparency in their data collection and ad transactions.
Both Google and Meta were not immediately available when reached out by Divinemercy for comment.
If the bill passes into law, it will deal a major blow to Big Tech’s digital ad model, which is frequently chastised for charging exorbitant fees. Democratic Senators Amy Klobuchar of Minnesota and Richard Blumenthal of Connecticut have also sponsored the bill.
Late last year, Google’s ad business also faced regulatory scrutiny from Canada’s competition watchdog. The country’s Competition Bureau launched an investigation into the search giant’s ad business, citing concerns that it was undermining ad competition in Canada.