A coalition of U.S. senators has proposed a new law that dismantles digital advertising Google and Facebook.
The Competition and Transparency Act for digital advertising will not allow companies with advertising revenue in excess of $ 20 billion to participate in more than one phase of the advertising chain. How recently explained in CongressGoogle currently acts on behalf of both market vendors and buyers, and chairs the auction process.
The new bill also contains conditions affecting small market players with advertising revenues in excess of $ 5 billion, generally designed to increase transparency in pricing.
Digital advertising business
Although online business advertising is extensive and complex, with many moving parts, it is ultimately dominated by two players: Alphabet and Meta, the parent companies of Google and Facebook.
The digital advertising served by the couple brings in the vast majority of their respective revenue. For example, in fiscal year 2021, digital advertising accounted for approximately 80% of Alphabet’s revenue, which was $ 210 billion.
However, the compression of the duo is now beginning to attract the attention of antitrust regulators on both sides of the Atlantic.
Earlier this year, Google and Facebook were even accused of concluding a secret deal aimed at ousting competitors from the market and consolidating their own positions. The agreement, nicknamed Jedi Blue, is currently being investigated in the UK and the EU, as well as in the US.
The latter proposal can be seen as an extension of these efforts to limit the ability of Google and Facebook to dictate the terms of the advertising market.
As reported in Wall Street Journal, the proposal was backed by senators on both sides, including such as Ted Cruz and Amy Klobuchar.
Google, for its part, argues that the bill would damage the quality of the experience for web users, a common refrain if the company came under fire from regulators and privacy defenders.
“Advertising tools from Google and many competitors help US websites and applications fund their content, help businesses grow and protect users from the risks of privacy and fraudulent advertising,” said Julie Tarala, a spokeswoman for Google.
“Hacking these tools will hurt publishers and advertisers, reduce the quality of advertising and create new privacy risks. And in times of high inflation, that would stop small businesses looking for simple and effective ways to grow online. ”
In a further statement, the company said it was “the wrong bill, at the wrong time, aimed at Wong’s goal” and tried to lay the blame for the adverse effects of digital advertising on “low quality data brokers”.
TechRadar Pro asked Meta for a response to the offer.
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