Congressional lawmakers accusing Google and Facebook of profiting from their market dominance have proposed legislation to break the tech giants’ monopoly on digital advertising.
The Digital Advertising Competition and Transparency Act has been introduced in the House and Senate. Proponents say it would restore and protect fair competition in the digital advertising markets dominated by Google and Facebook.
In a statement introducing the bill, Senator Mike Lee, Republican of Utah and lead sponsor, said the bill would free the internet from online monopolies.
“This lack of competition in digital advertising means that monopoly rents are imposed on every ad-supported website and every business – small, medium or large – that relies on internet advertising to grow its business,” Mr. Lee said. “It’s essentially a tax on thousands of American businesses, and therefore a tax on millions of American consumers.”
The bill was not scheduled for committee consideration in either chamber. It faces resistance from wary lawmakers, particularly those in California, home to Apple, Google’s parent company Alphabet and Facebook’s parent company Meta, and dozens of other tech players.
It also marks the latest legislative attempt by Congress to assert federal control over the thriving and largely ungoverned online industry.
The bill would prohibit large digital advertising companies such as Google from owning more than part of the digital advertising “ecosystem” and prevent them from playing dual roles in the advertising process.
The big companies, namely Google, should end their ownership of supply-side platforms and demand-side platforms that have helped them generate significant revenue.
In 2021, Alphabet earned over $209 billion from advertising and Meta earned around $115 billion from advertising.
Other big tech companies would also be affected.
Mr Lee said the legislation would likely force Google and Facebook to “divest significant portions” of their advertising businesses, which account for a large portion of their ad revenue.
Amazon could also be required to make divestments, and the bill “would impact” the development of Apple’s third-party advertising business, Lee said.
Mr Lee said Google, Facebook and other big tech companies need regulation because they have used huge amounts of user data to establish a monopoly on digital advertising that blocks competition and harms to consumers.
The measure attracted a handful of co-sponsors.
Support to curb Big Tech cuts across party lines.
The bill is co-sponsored by Sens. Ted Cruz, Republican of Texas, Amy Klobuchar, Democrat of Minnesota, and Richard Blumenthal, Democrat of Connecticut.
An identical measure was introduced Thursday in the House. It was sponsored by Rep. Ken Buck, a Republican from Colorado who has long sought to bring big tech companies to heel.
Support in the House also spans the political spectrum. Mr. Buck is a member of the conservative House Freedom Caucus. Co-sponsors include Rep. Pramila Jayapal of Washington, who chairs the Democratic Progressive Caucus.
Representatives Matt Gaetz, Republican of Florida, and David Cicilline, Democrat of Rhode Island, are also sponsors.
“The online advertising market is monopolized, opaque and rigged in favor of only two companies: Google and Facebook,” Cicilline said.
Despite broad political support, passage or even ground review of the legislation is far from guaranteed. Lawmakers from both parties have opposed government controls on thriving online platforms.
Previous attempts in Congress to implement antitrust reform in the tech industry have not come far, and this year’s legislative window is closing fast.
Congress is expected to adjourn in August for a long summer recess. When lawmakers return, the midterm elections will only be a few months away. They usually avoid major laws before confronting voters at the polls.
Among the key bills that Mr. Buck, Ms. Klobuchar and other supporters hope to push through this Congress is the U.S. Online Innovation and Choice Act, which would ban online companies like Amazon and Facebook from favoring their services compared to other advertisers.
The bill has advanced in the Senate and the House, but has yet to receive a floor vote in either chamber. Other lawmakers from both parties say the bill is too broad and could hurt consumers.
Big Tech received a protective firewall from the House and Senate delegation of California lawmakers.
“While I share the desire to reform digital markets and increase competition, as written, the bills are insufficient and will do more harm than good to American consumers and the American economy” , Rep. Zoe Lofgren, a California Democrat, said in a statement. opposing the American Choice and Innovation Online Act and a series of bills advanced earlier this year to curb tech monopolies.
Tech giants have spent millions of dollars lobbying Congress to block federal control over their industry. They argue that government regulations would cause a wide range of problems that would hurt advertisers and consumers.
Kent Walker, president of global affairs and chief legal officer of Google, said in a January blog post that legislation aimed at controlling Big Tech could stifle innovation by requiring companies to seek government approval before proceeding. launch programs. Consumers could end up with less useful apps, lower quality search results, and less security against cyberattacks.
“Antitrust law is about ensuring that companies compete head-to-head to create their best products for consumers,” Walker said. “But the vague and sweeping provisions of these bills would smash popular products that help consumers and small businesses, to benefit only a handful of companies that have appealed to Washington.”