This US Ruling Could Force Google to Break Up Its Ad Business

By Benzinga
Benzinga
Benzinga
May 20, 2022 Updated: May 20, 2022

A bipartisan group of senators led by Utah Republican Mike Lee introduced legislation targeting conflicts of interest in the advertising technology industry, the Wall Street Journal reports.

The legislation could force Alphabet Inc. Google to break up its dominant online-ad business.

The Competition and Transparency in Digital Advertising Act would prohibit companies processing over $20 billion in digital ad transactions annually from participating in more than one part of the digital advertising ecosystem.

It will require Google to divest significant portions of the digital advertising business it built following its 2008 acquisition of DoubleClick Inc. Google’s “network” business, which includes tools used by third parties to buy and sell ads, generated $31.7 billion in revenue in 2021.

Google is the dominant player at every link in the chain that connects buyers and sellers of online advertising.

The legislation would prohibit Google from operating tools that help companies sell and purchase ads and the auction houses, or exchanges, where transactions happen in split seconds.

Lee said, “When a company can wear all these hats simultaneously, it can engage in conduct that harms everyone.”

The legislation could force Meta Platforms Inc.’s Facebook to divest significant portions of its advertising business.

By Anusuya Lahiri 

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