Senate introduces new bill that could potentially break Google’s ad business

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The US Senate has introduced a new bill aimed at breaking up Google’s advertising business. If successfully passed into law, the bill would prevent companies that process more than $20 billion in annual digital ad transactions “from participating in more than one part of the digital advertising ecosystem,” reports The Wall Street Journal.

The Competition and Transparency in Digital Advertising Act has the support of both chambers of the lawmakers. Google generates more than that—and in fact, generated in excess of $50 billion in ad revenue last quarter alone. Of course, Google is not alone in terms of the threshold, the company is linked to many aspects of the ads process. Google, according to Engadget, runs an exchange where ad networks bid on inventory.

One other big player that may be affected by the bill if it becomes a law, is Meta. The social media giant generates mammoth figures in advertising every year, and may have to exit some of its businesses for compliance sake.

Should the bill become law, Google will have to relinquish some of those businesses. Google has one year to comply with the law as soon as it becomes a law.  

“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,” Sen. Mike Lee (R-Utah) told The Wall Street Journal. “When a company can wear all these hats simultaneously, it can engage in conduct that harms everyone.”

The bill is co-sponsored by Sens.Ted Cruz (R-Texas) and Richard Blumenthal (D- Connecticut), while the committee is chaired Sen. Amy Klobuchar (D-Minnesota).

Advertising tools from Google and many competitors help American websites and apps fund their content, help businesses grow and help protect users from privacy risks and misleading ads,” a Google spokesperson said per Engadget. “Breaking those 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. The real issue is low-quality data brokers who threaten Americans’ privacy and flood them with spammy ads. In short, this is the wrong bill, at the wrong time, aimed at the wrong target.”

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Author: Ola Ric

Ola Ric is a professional tech writer. He has written and provided tons of published articles for professionals and private individuals. He is also a social commentator and analyst, with relevant experience in the use of social media services.

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