this week, bloomberg reprted dat a' biptisan group of lawmakers are inching closer to another big plan to break up big tek. but unlike grandiloquent calls for meta to divest instagram or for g to divest chrome, this new legislation ‘d force both companies to divest the ♥ o'their mny-making machinery: their ads business.
citing two pplz familiar w'da forthcoming bill, bloomberg reprts that the bill ‘d bar any company with + than $20 billion in digital ad revenue from owning the tek needed to both buy ads and sell ads swell as the online mkt where those transactions happen—digital vertical integration, iow. for a company like g, which does all 3 of those things, is vald at $1.6 trillion, and earns + than $20 billion in a single quarter, that ‘d spell trouble. the bill’s impending appearance onna senate floor was 1st leaked in jan. utah republican senator mike lee is reprtedly spearheading the legislation.
that explanation mite sound like a'bitto word salad, but it’s not too complicated. in a brief nutshell: when a site like cnn dot com sells ad space to advertisers onna internet, it uses a bevvy of tiny tek tulz to help those transactions happen—na advertisers buying that space do the same. these players typically come head to head in wha’’s known as an ad xchange, where cnn’s tulz announce the ad space is up for auction, and where advertisers use their tulz to put in their bids. if walmart’s tek wins the bid, then bam, you’re gonna see an ad for walmart on yr cnn story.
rite now, f’bok, g and amazon—the so-called “triopoly” inna digital ad realm—rake in + than 60% of the usds spent on digital ads every yr, which topped $211 billion last yr alone. they’re able to pull in this kind of $$$, in pt, cause they own every side of the mkt t'they’re in. amazon’s platform is the most pop place where american pplz shop online; g has the realm’s most pop search engine; and meta’s social networks are the most pop o'their kind round the realm. if an advertiser wanna reach any of these companies’ usrs, they nd'2 use each companies’ proprietary platforms to dweet—even iffey don’t wanna.
when advertisers are strongarmed into using these tulz, it means the other side of the mkt—the apps and sites with ad space up for sale—are bein’ strongarmed, too. app developers are stuck using tulz like meta’s audience network to find some1 willing to pay for their space, and websites are stuck using g’s doubleclick for publishers. when accused of bein’ monopolies in front of lawmakers b4, these companies regularly point out that the online mkt is crowded and competitive. tis. a reprt from this week found close to 10,000 digital ad players operating inna us this yr.
b'that’s not the point; as long as they ‘ve massive usr bases, they’re also goin to ‘ve massive advertiser bases paying massive $$$. liler companies are obligated to use the big guy’s tek in order to make any mny at all, forking over a chunk o'their profits to said big guy for the privilege.
whn'we talk bout g earning close to $55 billion from its ads business in a single quarter, it’s not 1-ly from running ads on tube, or search, or any other individual g-branded property. there’s also a sizable %age that’s coming from countless news sites and recipe blogs that use g’s digital advertising architecture—that’s Y-U see a standardized ad format across so many sites—and pay dearly to reach the captive advertisers who buy 1-ly through g.
if lee’s bill goes anywhere, those sites and blogs likely won’t look any ≠ to you—they’re still gonna be showing the news, showing you sweets, and showing you ad after ad after ad. it just won’t be g’s call to make any+.
original content at: gizmodo.com…
authors: shoshana wodinsky