A bipartisan group of US senators have introduced a bill designed to stop big digital ad companies from owning more than one part of the online ad market.
Facebook, Google, Amazon, and Apple have all been specifically targeted by the bill as it would only impact companies than generate more than US$20 billion (almost AU$30 billion) in digital ad transactions.
“If enacted into law, this bill would most likely require Google and Facebook to divest significant portions of their advertising businesses-business units that account for or facilitate a large portion of their ad revenue,” said Republican Senator Mike Lee’s office.
The Advertising Middlemen Endangering Rigorous Internet Competition Accountability Act (handily shortened to the AMERICA Act) would mandate ad businesses generating more than US$20 billion cannot own an ad exchange and a supply- or demand-side platform. Supply-side owners would also be prohibited from owning a demand-side platform and vice-versa. Buyers and sellers of digital ads would also be prohibited from owning a demand- or supply-side platform, saving for selling their own inventory.
Companies generating more than US$5 billion (AU$7.5 billion) would face four key obligations: acting in the best interests of customers “including by making the best executions for bids on ads”; providing transparency for customers to verify they are acting in their best interests; if operating on both sides of the market, the company must “erect firewalls” to prevent abuse and conflict of interest; and provide “fair access” to customers to verify performance and information related to transactions, exchange processes, and functionality.
“The lack of competition in online advertising technology hurts not just advertisers and publishers but also consumers who pay more for products and see lower quality news and other content online,” added Charlotte Slaiman, competition policy director at pressure group Public Knowledge.
“Right now, advertising is the primary business model for much of the internet. It’s essential that online advertising be an open ecosystem with dynamic and fair competition. The Competition and Transparency in Online Advertising Act takes a remarkable step towards that ideal by breaking up the largest ad tech giants and creating common-sense rules of the road.”
Google’s parent company Alphabet is also facing an antitrust legal battle in the US. The government is seeking to break up the various parts of its business to help restore competition in the online ad market, as well as a range of other tech-related areas.
