New bipartisan bill would force Google to break up its ad business
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U.S. U.S. Senator Mike Lee (Republican from Utah) addresses the Senate Judiciary Committee at Capitol Hill, Washington, D.C., on October 13, 2020, during Judge Amy Coney Barrett, the nominee for the U.S. Supreme Court, confirmation hearing.
Demetrius Freeman | Pool | Reuters
The new bipartisan proposal is aimed at GoogleIt would be forced to disintegrate its digital advertising business, if it was passed.
Alphabet’s parent company is hugely dependent on advertising. In Q1, Alphabet reported $68.01 billion in revenue, $54.66 billion of which was generated by advertising — up from $44.68 billion the year prior.
On Thursday, a number of Senators who are key members of the Judiciary subcommittee to antitrust presented the Competition and Transparency in Digital Advertising Act. The ranking member and chairman were Sens. Mike Lee, R. Utah, and Amy Klobuchar D.Minn. Ted Cruz, R.Texas, and Richard Blumenthal D-Conn.
According to The Bill, the legislation would prohibit companies who process digital ad transactions in excess of $20 billion per year from being involved in any part of the process. The Wall Street JournalThe news was first published by. The bill did not include any additional details.
GoogleAccording to legend, the business has had to participate in several steps of the digital advertisements process. focus of a state-led antitrust lawsuit against the company. Google operates an exchange (or auction) where ads are traded. It also provides tools that help businesses sell or buy advertising. It would need to decide in what part of the company it wants to stay if the legislation is passed.
Lee explained to the Journal that Google can simultaneously serve as both a seller or buyer, and run an exchange. This gives them an unfair advantage in the market, but it doesn’t always reflect their value. A company that can hold all of these roles simultaneously can be harmful to everyone.
A Google spokesperson stated that advertising tools provided by Google and other competitors allow American websites and apps to fund content and grow their businesses, as well as protect consumers from misleading ads and privacy risks. Breaching these tools could harm advertisers and publishers as well as lower quality ads and increase privacy risks. It would also make it difficult for small businesses to find easy, cost-effective ways of growing online, especially in a period of high inflation. Low-quality data brokers that threaten Americans’ privacy, and then flood them with spammy advertisements is the real problem. This bill is not the right one, and it’s not the best time to send it.
This bill’s coalition demonstrates that support for antitrust reform to rein in tech power cuts across ideologies. The bill’s leader, Lee, is a top Republican, and he opposed certain antitrust reforms proposed by Klobuchar or others.
As chair of the subcommittee Klobuchar has led efforts to pass competition reforms this year. If Congress takes action on these bills in the required time, there are two main bills that have a chance to become law. American Innovation and Choice Online ActThis would stop dominant platforms from preferring their products to those of their competitors who rely on them, as well as the Open App Markets Act,It would be similar in impact, but the focus is on app stores like those of AppleGoogle. Lee voted for the former but against the former during the committee vote.
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