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Senate bill seeks to break up Google and Meta ad businesses

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The US government might not lean solely on lawsuits to limit online ad monopolies. A bipartisan group of senators has introduced the AMERICA Act (Advertising Middlemen Endangering Rigorous Internet Competition Accountability — yes, it's overwrought) with the intention of breaking up the ad businesses of tech giants like Google and Meta.

Large digital ad firms (those handling more than $20 billion in transactions) wouldn't be allowed to own both an ad exchange as well as either a demand- or supply-side platform. A supply-side platform owner couldn't own a demand-side system (and vice versa), while those buying and selling ads couldn't own either of the other platforms except to sell their own ad stock.

Companies that are medium-sized or larger (those handling over $5 billion in transactions) would also have to make the "best execution" for ad bids rather than deliberately holding back to serve their own operations. They need to be transparent and provide fair access to technical capabilities and data. If they do run businesses on two sides of the market, they have to establish "firewalls" to minimize abuse and conflicts of interest.

The bill is sponsored by a seemingly unlikely mix of senators that includes Mike Lee, Amy Klobuchar, Ted Cruz and Elizabeth Warren, among others. They aren't subtle about the ultimate goal: they expect Google and Meta to divest "significant portions" of their ad businesses to comply with the would-be law. Amazon and Apple might also have to take the AMERICA Act into account, the politicians say.

The sponsors single out Google as the bill's main target. As with lawsuits from the Justice Department and multiple states, the measure's creators accuse Google of manipulating the ad market in ways that unfairly disadvantage competitors. Google's control over a wide portion of the advertising system allegedly lets it charge "monopoly rents" across much of the internet.

We've asked Google and Meta for comment. They've previously fought bills and lawsuits meant to restrict their ad operations.

If the AMERICA Act passes, it would deal a significant financial blow. Google and Meta still rely on ad sales as their main sources of revenue, and in some cases use it to prop up other projects. Meta is sinking billions into its metaverse ambitions, as an example. While there's no way of knowing just how much revenue these companies would lose through divestments, they might have to rethink their broader strategies.

This article originally appeared on Engadget at https://ift.tt/keHBPLq

from Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics https://ift.tt/keHBPLq
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