A bipartisan group of lawmakers have proposed legislation aimed at breaking Google and Facebook’s market dominance over digital advertising.
Introduced by Sen. Mike Lee (R-UT), the Competition and Transparency in Digital Advertising would ‘restore and protect fair competition’ in digital advertising markets dominated by the tech giants, according to the Washington Times.
“This lack of competition in digital advertising means that monopoly rents are being imposed upon every website that is ad-supported and every company — small, medium or large — that relies on internet advertising to grow its business,” said Lee. “It is essentially a tax on thousands of American businesses, and thus a tax on millions of American consumers.”
The bill, which has yet to be scheduled for consideration in committee, will face resistance from lawmakers – particularly those from California which is home to Facebook, Google parent company Alphabet, and Facebook parent company Meta, among others.
It also marks the latest legislative attempt by Congress to assert federal control over the flourishing and largely ungoverned online industry.
The bill would ban large digital advertising companies such as Google from owning more than one part of the digital ad “ecosystem,” and it would block them from playing dual roles in the advertising process.
Large companies, namely Google, would have to end their ownership of both supply-side platforms and demand-side platforms that have helped them generate significant revenue. -Washington Times
Last year Alphabet earned over $209 billion from advertising, while Meta raked in around $115 billion.
The companies would be required to “divest significant portions” of their advertising business. The bill would also “impact” Apple’s budding third-party advertising business, said Lee, who added that the tech giants need to be regulated because they’ve established a monopoly over the digital ad space that blocks competition and hurts consumers, according to the report.
Other sponsors include Sens. Ted Cruz (R-TX), Amy Klobuchar (D-MN), Richard Blumenthal (D-CT).
Meanwhile an identical measure was introduced Thursday in the House by Rep. Ken Buch (R-CO), and is co-sponsored by Reps. Matt Gaetz (R-FL), David Cicilline (D-RI) and Pramila Jayapal (D-WA) who chairs the Democrats’ Progressive Caucus.
“The online advertising market is monopolized, opaque and rigged in favor of just two companies: Google and Facebook,” said Cicilline.
That said, previous attempts to reign in big tech suggest it may be an uphill battle, and this year’s legislative window to get anything moving is closing quickly before Congress is expected to adjourn by August for a long summer recess. When they return, all eyes will be on the midterm elections – a time when lawmakers typically avoid major legislation before voters hit the polls.
Protecting big tech is Rep. Zoe Lofgren (D-CA), who said earlier this year regarding similar legislation aimed at curbing tech monopolies: “While I share the desire to reform digital markets and increase competition, as drafted, the bills fall short and will create more harm than good for American consumers and the U.S. economy.”
As the Times notes, tech giants have spent millions of dollars lobbying Congress to block federal regulations, arguing that they would lead to a wide range of problems.
“Antitrust law is about ensuring that companies are competing hard to build their best products for consumers,” said Kent Walker, global affairs president and chief legal officer for Google in a January blog post addressing the earlier bills. “But the vague and sweeping provisions of these bills would break popular products that help consumers and small businesses, only to benefit a handful of companies who brought their pleas to Washington.”