US bill may force Google, Facebook to break up digital ad business

NEW DELHI: A new bill introduced by the US Senate may force tech giants like Google and Facebook to break up their digital advertising business in order to ensure transparency, according to a report by The Wall Street Journal. The bill, if passed, would ban companies processing more than $20 billion in ad business annually from participating in more than one part of the digital ad process.
Google’s parent Alphabet reported $68 billion in revenue in January-March 2022, of which $54.7 billion was generated by advertising.
The Competition and Transparency in Digital Advertising Act is likely to directly impact big tech firms like Google, which is known to have a hand in multiple steps of the digital ad process.
Meta Platforms’ Facebook may also face the heat of the bill and could be required to divest a significant part of its ad business.
Google operates tools that help firms transact in online ads, as well as the auction houses or exchanges where they happen in few seconds, according to the WSJ report.
It noted that under the legislation, Google would not be able to stay in all those businesses.
The bill was introduced by a group of senators representing Democrats and Republicans on the judiciary subcommittee on antitrust, co-sponsored by Senators Mike Lee, Ted Cruz, Amy Klobuchar and Richard Blumenthal. The legislation would be the most significant change to antitrust law in a generation, the WSJ report said.