Ted Cruz, Elizabeth Warren, and More Unlikely Senators Propose Bill to Break Up Google and Meta

A powerful and bizarre coalition of Senators have teamed up on a bill that could strike down the digital ad dominance of Google and Meta, though the proposed legislation never mentions those companies by name. The AMERICA Act could radically transform advertising technology, the financial backbone of the internet.

Try to say the bill’s title in one breath: The Advertising Middlemen Endangering Rigorous Internet Competition Accountability Act, aka the AMERICA Act. Say what you will about government; Congress’ acronym acumen is untouchable. Introduced by Republican Sen. Mike Lee of Utah, the bill would prohibit companies from owning multiple parts of the digital ad ecosystem if they “process more than $20 billion in digital ad transactions.”

The bill would kneecap Google and Meta, the two biggest players in digital advertising by far, but its provisions seem designed to affect almost every big tech company from Apple to Amazon, too. Google, Meta, Amazon, and Apple did not respond to requests for comment.

The only thing longer than the name of the bill is the stunningly bipartisan list of Senators supporting it: Democrats Amy Klobuchar, Richard Blumenthal, and Elizabeth Warren, and Republicans Ted Cruz, Marco Rubio, Eric Schmitt, Josh Hawley, John Kennedy, Lindsey Graham, J.D. Vance, and Lee. As one observer put it on Twitter, it’s a list of cosponsors “who wouldn’t hold the elevator for each other.” Look at all these little Senators getting along. Isn’t that nice?

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“Companies like Google and Facebook have been able to exploit their unprecedented troves of detailed user data to obtain vice grip-like control over digital advertising, amassing power on every side of the market and using it to block competition and take advantage of their customers,” Sen. Lee said in a press release. “The conflicts of interest are so glaring that one Google employee described Google’s ad business as being like ‘if Goldman or Citibank owned the NYSE.’”

This means Google is now fighting a legal battle on four different fronts. The Justice Department filed an antitrust case against the tech giant in January, and an entirely separate DoJ antitrust case filed in 2020 against Google is also scheduled for trial this year. Meanwhile, multiple states attorneys general have filed antitrust suits against Google over Google Pay’s fees and an alleged digital ad monopoly.

“If enacted into law, this bill would most likely require Google and Facebook to divest significant portions of their advertising businesses—business units that account for or facilitate a large portion of their ad revenue,” Sen. Lee said in a fact sheet about the bill. “Amazon may also have to make divestments, and the bill will impact Apple’s accelerating entry into third-party ads.”

To understand what all the fuss is about, I regret to inform you that you must understand a little bit about the advertising technology stack. You’re two paragraphs away from everything you need to know about ad tech to bore impress people at parties. (If you want, you can pretend you’re scrolling TikTok and open a Subway Surfer video.)

When you see an ad online, it’s usually the result of a lightspeed bidding war. On one side, the demand side, you have companies who want to buy ads. On the other, the supply side, are apps and websites who have ad space to sell. Advertisers use demand-side tech to compete for the most profitable ad space for their products. Publishers, like Gizmodo.com, use supply-side tech, where they compete to sell the most profitable ads. Sometimes there’s a third piece of tech involved called an “exchange,” which is a service that connects demand-side platforms and supply-side platforms to arrange even more complicated auctions.

Your friends at Google operate the most popular demand-side platform. Google also owns the most popular supply-side platform, and it runs the most popular exchange. And Google is also a publisher, because it sells ad space on places like YouTube and Search. Meta likewise has its hands in multiple corners of the pie. Here’s an analogy: it’s like if the realtor you contracted to represent you in buying a house had also been contracted by the people selling the house. It would be hard to trust that anyone was getting a fair deal, wouldn’t it? That realtor would be in a unique position to jack up the prices for everyone and make extra cash. The dominance is quantifiable—Google itself estimates that it snatches a stunning 35% of every dollar spent on digital ads.

Some people think this is all a little unfair! Unfortunately for Google and Meta, more and more of those people work for the US government.

The AMERICA Act takes several steps to address this, according to its authors. It would prohibit big companies who own exchanges from owning supply– or demand-side platforms, as Google does. It also says you can’t own a supply-side platform if you run a demand-side platform, and vice versa—as Google does.

The bill would also compel companies that process more than $5 billion in digital ad transactions to protect their customers and competition. They would be legally obligated to protect the interests of their customers and provide transparency so that protection can be verified. Any company hoping to operate on both sides of the market would be required to “erect firewalls to prevent abuse and conflicts of interest.”

Taking on big tech may be the only thing that truly unites Democratic and Republican lawmakers. Earlier this month, a bipartisan committee put TikTok’s CEO through the gauntlet in a brutal five-hour hearing.

This isn’t the first congressional bite at this digital antitrust apple. Sen. Lee introduced a nearly identical bill last year, which floundered without much fanfare. But as self-imposed pressure mounts on Congress to do something about this problem, it looks more and more likely that action is a possibility.

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