What is the ‘Competition and Transparency in Digital Advertising Act’?
The Executive Headlines
In a piece of recent news, a bill would possibly break up Google’s advertising business if it becomes a law. The Competition and Transparency in Digital Advertising Act would prevent companies that process more than $20 billion in annual digital transactions.
The ‘Competition and Transparency in Digital Advertising Act’
According to various reports, the Competition and Transparency in Digital Advertising Act have support from both sides of the aisle. It would prevent companies from participating in more than one part of the digital advertising ecosystem.
Google easily falls under that distinction. It generated $54.7 billion in ad revenue last quarter alone. While other companies meet the dollar-figure threshold of the proposed rules, Google has a hand in many aspects of the advertising process. It runs an exchange where ad networks bid on inventory. It also offers tools to help companies buy and sell ads.
A House of Representatives version of the legislation is also expected to be introduced imminently. If the Competition and Transparency in Digital Advertising Act become law, Google would have to exit some of those businesses. It would have a year to comply with the rules after the law is enacted. Meta may also be impacted by the legislation.
“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 told the media.
Other Imminent Provisions
Other provisions of the Competition and Transparency in Digital Advertising Act include rules for companies that process at least $5 billion of ad transactions per year. They'd be required to provide transparent pricing and act in their customers' best interest. Customers would have the option to sue over breaches of those.
There are other pieces of antitrust legislation in the works that target tech giants. Klobuchar’s American Innovation and Choice Online Act, which advanced out of committee in January, would ban companies from giving preference to their own products over those from rivals on their own platforms. For instance, Apple wouldn't be able to position its own apps above competing ones in App Store search results.