In an effort to limit online ad monopolies, the US Senate is seeking to pass the AMERICAN Act (Advertising Middlemen Endangering Rigorous Internet Competition Accountability), to break up ad businesses of tech giants like Google and Meta.
According to the Act, large digital ad firms won’t be allowed to own both sides of an ad exchange, where they have ownership over demand and supply-side platforms.
Additionally, those buying and selling ads can’t own both the demand and supply side of the ad platform, except to only sell their ad stock.
Medium-sized companies will also be required to make the “best execution” for ad bids, instead of just holding back to serve their operations. The Act emphasizes transparency and access to technical capabilities and data.
If a business, however, does run two sides of the market, it will need to establish “firewalls” to minimize abuse and conflicts of interest.
Senators sponsoring the Act aren’t subtle about their intentions to ultimately get Google and Meta to divest “significant portions” of their ad businesses. Apple and Amazon might be required to comply with the Act as well, politicians said.
Lawsuits from the Justice Department and other states have seen creators accuse Google of manipulating the ad market in ways that unfairly disadvantage competitors. Allegedly, Google’s ad monopoly lets it charge “monopoly rents” on the internet.
The AMERICA Act has yet to be passed, but its implementation would mean a huge blow for Google and Meta who rely on ad sales as their main revenue.
Courtesy The Express Tribune 2023!
