Google: New bill could force Google to disband its advertising business

Google New legal trouble is being faced. This time it has threatened to sabotage its biggest business – digital advertising. A new bipartisan bill introduced by a group of Senate Republicans and Democrats threatens to sabotage Google’s advertising business if passed. competition and transparency digital advertising act, it seeks to “restore and protect competition in digital advertising by eliminating conflicts of interest that have allowed market-leading platforms to manipulate ad auctions and enforce monopoly fares across broad swathes of the US economy.” ” The bill is co-sponsored by senators mike leeTed Cruz, Amy Klobuchar, and Richard Blumenthal.
What is Competition and Transparency in Digital Advertising Act?
The bill reportedly outlines two rules: one for companies with more than $20 billion in revenue per year and another for companies with more than $5 billion in revenue per year. The $20 billion number applies to the big giants of digital advertising, such as Google, Facebook and heroine, Although the bill targets Google directly with each rule, any other company that has $20 billion in advertising transactions must also comply with the rules.
Google runs an exchange where ad networks bid on inventory, which means a platform or auction where advertising transactions are made and prices are set. The company also provides tools to help businesses buy and sell ads. Critics have a problem with the company’s business model. They claim that Google engages in monopolistic practices in the digital advertising market. The fact that the company represents both suppliers and buyers of online ads, while also conducting real-time auctions, creates an antitrust issue.
“When you have Google simultaneously serving as a seller and a buyer and running an exchange that gives them an unfair, unfair advantage in the marketplace that doesn’t necessarily reflect the value they’re providing.” It is,” Senator Mike Lee (R-Utah) told the Wall Street Journal. “When a company can wear all these hats together, it may be engaging in conduct that harms everyone,” he said.
Why Google may be forced to disband its business
The bill could force Google to sell most of its digital advertising business, as it earns advertising dollars on its services Search, YouTube and on its ad network. Total Google advertising revenue was $54.7 billion (up 22% from $44.7 billion) in the previous quarter Q1 2022. The bill is thus intended to be Google’s primary source of revenue. If the new law is passed, Google will have to choose which of these businesses it wants to keep.
Google’s response
In a statement, Google said, “The advertising tools from Google and many competitors help American websites and apps fund their content, help businesses grow, and protect users from privacy risks and deceptive ads.” Breaking those tools will hurt publishers and advertisers, lower ad quality, and create new privacy risks. And, in a time of rising inflation, it will hinder small businesses from looking for easy and effective ways to grow online ”

Source link

Sharing Is Caring:

Leave a Comment