Congress will launch a bipartisan effort to break Google’s ad hegemony in another pitched battle between lawmakers and big tech.
The Digital Advertising Competition and Transparency Act would prohibit companies with digital advertising transactions exceeding $20 billion from participating in more than part of the digital advertising process.
The bill is co-sponsored by Sens. Ted Cruz (R., Texas), Amy Klobuchar (D., Minn.) and Richard Blumenthal (D., Connecticut), according to the Wall Street Journal.
Google would suffer significantly from this bill due to parent company Alphabet’s revenue of more than $54 billion from digital advertising in the first quarter alone. The bill would essentially have to be split in some form to comply with new federal requirements.
The company’s legal troubles began in 2020 with an antitrust lawsuit from the Justice Department, which alleged that Google used exclusive deals with mobile carriers and phone makers to control competition. Then-Attorney General William Burr said Google maintained a “grip on the internet for millions of people […] beholden to an illegal monopolist”.
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Biden’s Justice Department has opened new investigations into Google’s alleged antitrust practices regarding digital advertising, but no lawsuits have yet been filed about it.
But Texas filed a lawsuit, which grew into a multi-state effort, for its advertising practice, in January of this year. Google economic policy director Adam Cohen wrote of the lawsuit that the company viewed it as “more heat than light” that did “not meet the legal standard to take the case to court.” .
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“The complaint misrepresents our business, our products and our motives, and we are preparing to dismiss it due to its failure to offer plausible antitrust claims,” Cphen wrote in a blog post.
Google maintains a role in multiple stages of its digital advertising practice — a practice Sen. Mike Lee, R-UT, has lambasted as wearing multiple hats simultaneously.
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“When a company can wear all of these hats simultaneously, it can engage in conduct that harms everyone,” Lee told the Journal this week.
A Google spokesperson said of the new law that “restricting these tools would harm publishers and advertisers, reduce ad quality, and create new privacy risks.”
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“The real problem is shoddy data brokers threatening Americans’ privacy and flooding them with spammy ads,” the spokesperson explained.
Companies would have one year to comply with the new requirements if the law comes into effect.
FOX Business’ Hillary Vaughn contributed to this report.
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