New Bill Would Force Google, Alphabet to Break up Ad Businesses

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Competition and Transparency in Digital Advertising Act Overview: 

• Who: A bipartisan group of senators on the judiciary subcommittee on antitrust proposed a new bill called the Competition and Transparency in Digital Advertising Act.
• Why: The bill would force any company that makes more than $20 billion in annual revenue to only participate in one part of the digital advertising process. 
• Where: The bill would affect companies nationwide. 

A new bill proposed with bipartisan support would break up the digital advertising business of Google and its parent company, Alphabet.

The bill, called the Competition and Transparency in Digital Advertising Act, seeks to prevent companies that make more than $20 billion in annual revenue from being able to participate in multiple stages of a digital advertising process, The Wall Street Journal reported. 

A bipartisan group of senators on the judiciary subcommittee on antitrust proposed the bill, which would be a significant drain on Google’s parent company, Alphabet, which reported a total of $54.66 in first-quarter advertising revenue, CNBC reported.

Google plays a role in multiple parts of the digital advertising process with the company running an auction for ad transactions and hosting tools that help advertising companies buy and sell ads. If the bill were to pass, Google would have to limit itself to only one part of the digital advertising process, CNBC reports. 

Bill Would Force Google to Limit Itself to Single Role in Digital Ad Process

The bipartisan nature of the bill shows the belief that big tech, such as Alphabet and Google, needs to be reigned in with antitrust reform goes beyond party lines, CNBC reports. 

Senators proposing the bill are Mike Lee, R-Utah; Amy Klobuchar, D-Minn.; Ted Cruz, R-Texas; and Richard Blumenthal, D-Conn.

The bill would also likely significantly affect Facebook’s parent company, Meta, The Verge reported. 

Companies that make more than $5 billion in digital advertising revenue annually, meanwhile, would also have to abide by new rules regarding transparency and acting in a consumer’s best interest. 

Meanwhile, a judge preliminarily approved a $7 million settlement made between Google and a group of advertisers claiming the tech giant failed to refund their account balances after they were shut down. 

Have you used Google for digital advertising services? Let us know in the comments. 

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