The US government may not be able to rely solely on lawsuits to limit its online advertising monopoly. A bipartisan group of senators introduced the AMERICA Act (Advertising Middlemen Enangering Regorous Internet Competition Accountability — yes, overkill) with the intention of dismantling the advertising business of tech giants such as Google and Meta.
Large digital advertising companies (those that process more than $20 billion in transactions) cannot own both an ad exchange and a demand-side or supply-side platform. Owners of supply-side platforms could not own demand-side systems (and vice versa). Ad-buyers, on the other hand, could not own any other platform other than selling their own ad stock.
Medium-sized and larger businesses (those with more than $5 billion in transaction value) also need to “do it the best” with their ad bids, rather than willfully withholding to do their job. They should be transparent and provide fair access to technical capacity and data. When operating on both sides of the market, a “firewall” must be established to minimize abuse and conflicts of interest.
The bill is sponsored by a seemingly unlikely combination of senators, including Mike Leigh, Amy Klobuchar, Ted Cruz and Elizabeth Warren. They’re not nuanced about their ultimate goal. They expect Google and Meta to sell a “substantial portion” of their advertising business to comply with future legislation. Amazon and Apple will also comply with the AMERICA Act. may need to be taken into account, say politicians.
Sponsors have named Google as the primary target of the bill. Like lawsuits from the Department of Justice and several states, the bill’s authors have accused Google of manipulating the advertising market in a way that unfairly disfavors its competitors. Google is said to be able to charge “exclusive royalties” on much of the Internet because it controls so much of the advertising system.
We reached out to Google and Meta for comment. They have previously fought bills and lawsuits aimed at restricting advertising operations.
If the AMERICA Act is passed, it will hit us hard financially. Google and Meta still rely on advertising sales as their primary source of revenue, sometimes using it to support other projects. As an example, Meta has sunk billions of dollars into its Metaverse ambitions. We have no way of knowing how much revenue these companies will lose on sale, but they may need to rethink their broader strategy.