The Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act introduced earlier today by a bipartisan group of senators aims to prohibit companies with more than $20 billion in digital ad revenue from running a ‘digital advertising exchange.’ This would force structural and behavioral changes on large and medium-sized companies in the digital advertising space and likely require companies like Google and Meta to sell off parts of their business.
For companies with more than $5 billion in digital ad revenue, the bill imposes several behavioral requirements, including establishing an internal “firewall” between the buy- and sell-sides of the business, an obligation to act in the best interest of their customers, greater transparency, and an obligation to undergo an annual compliance test.
Competition in the digital ad space is dynamic, and it is what makes the free and open internet that we all know and enjoy possible. Without advertising, online platforms could be forced to charge for their services. Add to this that small businesses often rely on ad tech to reach their customers. The changes envisioned by this bill could make it cost prohibitive for them to continue to do so. This bill continues a trend seen in other recent legislation, where legislators seek to use the blunt instrument of antitrust law to punish a handful of large corporations, focusing only on the company’s size, not its conduct. If there are issues that need to be addressed, this is the wrong way to do it.
We encourage lawmakers to consider other options to resolve conflict of interest concerns, such as establishing a code of conduct to mandate individually tailored behavioral changes, coupled with auditability that would be implemented across the entire industry, not just to a small group of companies that are disfavored simply because of their size. Our nation has long believed in punishing companies for bad behavior, not for their success. That principle should continue to stand in the digital age.