For the wall street journal it is ” one of the most aggressive legislative proposals circulating in Congress aimed at limiting the power of big tech companies “. The Digital Advertising Competition and Transparency Act proposed by Republican and Democratic senators on May 19 could result in the dismantling of Google’s ad tech business and possibly Meta.
Google can shake
It is the most influential senators of the Antitrust Judiciary Subcommittee who are behind this proposal. It is carried by the main Republican of the subcommittee, Republican Mike Lee, the chairwoman of the subcommittee, Democrat Amy Klobuchar, as well as two figures from both camps, Republican Ted Cruz and Democrat Richard Blumenthal.
Saudi Arabia acquires 5% stake in Nintendo
The objective of this law is to combat conflicts of interest in the digital advertising sector. Companies processing more than $20 billion in ad transactions per year would be excluded from some of the industry’s business.
Google is often criticized for its presence at all stages of advertising auctions. The company manages them, but also offers tools to help third parties sell or buy ads. This earned Google an antitrust lawsuit from more than a dozen US attorneys general in 2020. The thoughtful European Commission also attacked Mountain View on this point.
Mike Lee explained to wall street journal that ” When Google is both seller and buyer and operates an exchange market, it has an unfair and unfair advantage in the market, which does not necessarily reflect the value it brings. “.
Faced with this legislative offensive, carried out by senators who are more accustomed to confronting each other, Google declared that its advertising tools, and those of its competitors, ” help US websites and apps fund their content, help businesses grow, and protect users from privacy risks and misleading ads “.
The company claims that ” Removing these tools would harm publishers and advertisers, reduce ad quality, and create new privacy risks “.
Alphabet, Google’s parent company, like Meta, which could meet the criteria of the law, is very dependent on advertising revenue. In the fourth quarter of 2021, the sector accounted for 80% of the company’s turnover, with 61.2 billion in revenue. It is therefore hardly surprising that Google considers that ” it’s the wrong bill, at the wrong time, aimed at the wrong target “.
U.S. antitrust update drags on
A similar bill must be presented to the House of Representatives, in a bipartisan way there too. The Congress is the theater of a real effervescence around the actualization of the American antitrust legislation.
The two statutes that founded it, Claytone and Sherman, date from 1914 and 1890 respectively. The last major update to the Claytone Act was in 1970. they are no longer adapted to the reality of the economic models of the major platforms. Focused on the impact of prices for the consumer, they ignore the domination of companies relying largely on free services.
The avalanche of proposals to update these laws to the digital economy has, for the moment, not succeeded. The bipartisan nature of the Digital Advertising Competition and Transparency Act should undoubtedly improve its chances of passage, even if the Democrats lose their weak congressional sway in November’s midterm elections. 2022. If it were to pass, the companies concerned, therefore Google, will have one year to comply with it after its promulgation.