Google’s ad business would be broken up under new bipartisan bills

Google's ad business would be broken up under new bipartisan bills

Google’s gargantuan online ad business would be broken up under a pair of tough bipartisan proposals being introduced in both chambers of Congress, The Post has learned. 

The pair of bills would bar large companies from operating in multiple parts of the online ad supply chain — effectively ending what critics say is Google’s ability to act as the dominant buyer, seller and broker in the online ad world. 

Passage of the bills would deal a multibillion-dollar blow to Google’s current business model, which critics claim allows the company to effectively put a “monopoly tax” on the internet. 

Rep. Ken Buck (R-Colo.) is the lead sponsor of the forthcoming House bill, while David Cicilline (D-RI) is a co-sponsor, both lawmakers’ offices confirmed to The Post.

“Google is selling ads, they’re buying ads, and they’ve bought the auction company,” Buck told The Post. “All this bill does is say you can’t do all three.” 

Buck added that he is still in the process of gathering additional co-sponsors before the bill is introduced.

A Senate version of the legislation, called the “Competition and Transparency in Digital Advertising Act,” was introduced Thursday morning by Mike Lee (R-Utah), with Sens. Amy Klobuchar (D-Minn.), Richard Blumenthal (D-Conn.) and Ted Cruz (R-Texas) acting as co-sponsors. 

Rep. Ken Buck
Rep. Ken Buck (R-Colo.) is the lead sponsor of the forthcoming House bill.
Bloomberg via Getty Images

According to a copy of the Senate bill seen by The Post, it would apply to publicly traded companies with $20 billion in annual adverting revenue — meaning that Facebook and Instagram parent company Meta could be affected in addition to Google. 

The bill would also give advertising brokerages “best interest duty” to their customers, similarly to how financial advisers on Wall Street are legally required to act for the sole benefit of their clients.

“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,” Lee said in a statement. “It is essentially a tax on thousands of American businesses, and thus a tax on millions of American consumers.”

Rep. David Cicilline
Rep. David Cicilline (D-RI) is a co-sponsor of the House bill.
Future Publishing via Getty Imag

Klobuchar said the bill would restore and protect competition in digital advertising to “create a more even playing field that will promote fairness and innovation moving forward.”

In a statement to The Post, a Google spokesperson slammed the proposal as the “wrong bill, at the wrong time, aimed at the wrong target.”

“Advertising tools from Google and many competitors help American websites and apps fund their content, help businesses grow, and help protect users from privacy risks and misleading ads,” a Google spokesperson said.

Google said the bill is the “wrong bill, at the wrong time, aimed at the wrong target.”

“Breaking those tools would hurt publishers and advertisers, lower ad quality, and create new privacy risks. And, at a time of heightened inflation, it would handicap small businesses looking for easy and effective ways to grow online. The real issue is low-quality data brokers who threaten Americans’ privacy and flood them with spammy ads.” 

Meta did not immediately respond to a request for comment. 

The Senate bill was first reported by the Wall Street Journal on Thursday. News of Buck and Cicilline’s companion has not been previously been reported. 

The Post first reported in January that Cicilline and Buck were considering sponsoring a House version of an online ad market bill. 

Source link