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A new bipartisan proposal could force Google to separate its its advertising business

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A new bipartisan proposal could force Google to separate its its advertising business

If passed, a new bipartisan proposal would force to split up its digital .

Sens. Mike Lee, R-Utah, and , D-Minn., as well as Sens. Ted Cruz, R-Texas, and Richard Blumenthal, D-Conn., introduced the Competition and Transparency in Digital Advertising Act on Thursday.

Alphabet’s parent company’s is heavily reliant on advertising. Alphabet reported $68.01 billion in revenue in the first quarter, with advertising accounting for $54.66 billion, up from $44.68 billion the previous year.

According to The Wall Street Journal, which broke the story first, the bill would prohibit companies that process more than $20 billion in digital ad transactions per year from participating in more than one part of the digital ad process.

is notorious for having a hand in multiple stages of the digital ad process, which has become the subject of a state-led antitrust lawsuit against the company. runs an auction, or exchange, where ad transactions are made, as well as tools to assist businesses in selling and buying ads. If the new legislation is passed, it will have to decide which part of the it wants to stay in.

“When you have simultaneously serving as a seller and a buyer and running an exchange, that gives them an unfair, undue advantage in the marketplace, one that doesn’t necessarily reflect the value they are providing,” Lee said in an interview with the Journal. “When a company can wear all of these hats at the same time, it can engage in behavior that harms everyone.”

and many competitors’ advertising tools help American websites and apps fund their content, businesses grow, and users avoid privacy risks and misleading ads,” a Google spokesperson said in a statement. “Breaking those tools would be detrimental to publishers and advertisers, reduce ad quality, and introduce new privacy risks.” And, in an era of rising inflation, it would be detrimental to small businesses looking for simple and effective ways to grow online. The real problem is low-quality data brokers who violate Americans’ privacy and bombard them with spammy advertisements. In a nutshell, this is the wrong bill, at the wrong time, and aimed at the wrong person.”

The bill’s coalition underscores how support for limiting tech power through antitrust reform cuts across ideological lines. It’s also worth noting that Lee, the top Republican on the subcommittee, led the bill, despite his opposition to some of the other antitrust reforms proposed by Klobuchar and others.

As chair of the subcommittee, Klobuchar has led an effort to pass competition reforms this year. So far, two major bills have emerged as having a fighting chance of becoming law if Congress acts quickly: the American Innovation and Choice Online Act, which would prohibit dominant platforms from favoring their own products over those of competitors who rely on their services, and the Open App Markets Act, which would have a similar impact but would focus on app stores such as those from Apple and Google. During committee votes, Lee supported the latter but not the former..

 

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