Google revenue

New bipartisan bill could dent big tech ad revenue

A group of Republican and Democratic senators today introduced a bill that targets the advertising activities of companies including Google LLC, Meta Platforms Inc and Amazon.com Inc.

“The Competition and Transparency in Digital Advertising Act” presented by Senators Ken Buck (R-Colorado), Burgess Owens (R-Utah), Pramila Jayapal (D-Washington), David Cicilline (D-Rhode Island) and Matt Gaetz ( R-Florida) aims to prevent companies that make more than $20 billion in digital advertising revenue from participating on both sides of the digital advertising market.

The bill’s sponsors said the dominance of big tech in the advertising market hurts competition. Companies such as Meta and Google, they said, are free to impose “monopoly rents” and act as sellers, buyers and brokers within the advertising ecosystem. Amazon also has a significant ad business now.

“The online advertising market is monopolized, opaque and rigged in favor of only two companies: Google and Facebook,” Cicilline said. “In the case of Google, it controls both sides of the market for buying and selling online advertising, and routinely exploits this conflict of interest to favor its own services or obtain higher prices from others. The combined dominance of Google and Facebook is an existential threat to news publishers and small businesses, and their abuse of that dominance imposes a hidden tax on consumers every day.

Senator Jayapal said the bill will not just crack down on monopolies enjoyed by tech giants, but will help local newspapers and independent journalism. “We can’t let these Big Tech monopolies like Google and Facebook continue to stifle the digital advertising ecosystem,” she said. “Google, in particular, totally controls the advertising market: it manages the market where local newspapers have to advertise, and then it controls both the buy side and the sell side of that market.”

Google would be by far the hardest hit if the bill passes. Today, the company commented on the bill, saying it was “the wrong bill, at the wrong time, aimed at the wrong target”. He added that poor quality data brokers would mean more spam and pose a threat to the privacy of the average consumer.

“Advertising tools from Google and many competitors help US websites and apps fund their content, help businesses grow, and help protect users from privacy risks and misleading ads,” said Google in a media release. “Breaking these tools would harm publishers and advertisers, reduce ad quality and create new privacy risks. And, in an age of increased inflation, it would handicap small businesses looking for simple and effective ways to grow online.

Photo: Pawel Czerwinski/Unsplash

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