The US government may not rely solely on lawsuits to limit online advertising monopolies. A bipartisan group of senators has inserted the AMERICA Act (Advertising Middlemen Endangering Rigorous Internet Competition Accountability, yes, it is exaggerated) with the intention of dividing the advertising businesses of technological giants such as Google and Meta.
Large digital ad firms (those handling more than $20 billion in transactions) would not be allowed to own both an ad exchange and a demand-side or supply-side platform. The owner of a supply-side platform could not own a demand-side system (and vice versa), while those who bought and sold ads could not own any of the other platforms except to sell their own advertising material.
Medium to large companies (those handling more than $5 billion in transactions) would also need to do “best execution” for ad deals rather than deliberately pausing to attend to their own operations. They must be transparent and provide fair access to technical skills and data. If they run businesses on both sides of the market, they must establish “firewalls” to minimize abuse and conflicts of interest.
The bill is sponsored by a seemingly unlikely mix of senators that includes Mike Lee, Amy Klobuchar, Ted Cruz and Elizabeth Warren, among others. They’re not subtle about the end goal: They expect Google and Meta to divest “significant portions” of their ad businesses to comply with the potential law. Amazon and Apple might also have to reckon with the AMERICA Act, politicians say.
The sponsors point to Google as the main target of the bill. As with the lawsuits from the Justice Department and several states, the creators of the measure accuse Google of manipulating the ad market in a way that unfairly hurts competitors. Google’s control over much of the advertising system supposedly allows it to collect “monopoly rents” on much of the Internet.
We have asked Google and Meta for feedback. They previously fought bills and lawsuits aimed at restricting their advertising operations.
If the AMERICA Act passes, it would be a significant financial hit. Google and Meta still rely on ad sales as their main sources of revenue, and in some cases use it to prop up other projects. Meta is pouring billions into its metaverse ambitions, for example. While there’s no way of knowing how much revenue these companies would lose through divestments, they may need to rethink their broader strategies.
