Sundar Pichai, CEO of Alphabet and Google
Mateusz Wlodarczyk Nurfoto | Getty Images
New bipartisan proposal is targeting Google and will force it to crash its digital advertising business if approved.
The Competition and Transparency in Digital Advertising Act was introduced Thursday by a group of key senators on the Judiciary Subcommittee on Antitrust: member and chairman, Senator Mike Lee, R-Utah, and Amy Klobuchar, D-Minn. as meaning. Ted Cruz, R-Texas, and Richard Blumenthal, D-Conn.
Advertising is a huge part of the business of the parent company Alphabet. In the first quarter, Alphabet reported revenue of $ 68.01 billion, of which $ 54.66 billion was generated from advertising, up from $ 44.68 billion a year earlier.
The bill will ban companies that process more than $ 20 billion a year in digital advertising transactions from participating in more than one part of the digital advertising process, according to The Wall Street Journalwho was the first to announce the news.
Google is disgracefully involved in many steps in the process of digital advertising, a business that has become the focus of a state-run antitrust lawsuit against the company. Google runs auctions or exchanges where advertising transactions take place, and also uses tools to help companies sell and buy ads. If the new legislation is passed, it will have to choose which part of the business it wants to stay in.
“When Google serves both as a seller and a buyer and manages the stock market, it gives them an unfair, unjustified market advantage that doesn’t necessarily reflect the value they provide,” Lee told the Journal. interview. “When a company can wear all these hats at once, it can engage in behavior that harms everyone.”
“Google’s advertising tools and many competitors help US websites and applications fund their content, help businesses grow, and help protect consumers from privacy risks and misleading advertising,” a Google spokesman said in a statement. “Violating these tools would harm publishers and advertisers, lower the quality of ads and create new privacy risks. And in times of high inflation, this would prevent small businesses from looking for easy and effective ways to grow online. The real problem is low-quality data brokers that threaten Americans’ privacy and flood them with spam. In short, this is the wrong account, at the wrong time, aimed at the wrong goal. “
The coalition behind the bill underscores the way in which support for seizing technological power through antitrust reform crosses ideological lines. It is also noteworthy that Lee, the top Republican on the subcommittee, is leading the bill, given that he has opposed some of the other antitrust reforms at the Klobuchar table and others.
Klobuchar, as chairman of the subcommittee, is leading efforts to carry out competition reforms this year. So far, two major bills have emerged as having a fighting chance to become law if Congress takes action on it in time: the US Innovation and Online Choice Act, which would prevent dominant platforms from preferring their own products to those that rely on their competitors. services and the Open Apps Market Act, which would have a similar impact but focus on app stores like Apple and Google. Lee supported the latter, but not the former, during the committee vote.
WATCH: That’s why some experts call for Big Tech’s breakup following an antitrust report by the House of Representatives