Congressional lawmakers accusing Google and Facebook of profiteering off their market dominance have proposed legislation to break the tech giants’ monopoly over digital advertising.
The Competition and Transparency in Digital Advertising Act has been introduced in the House and Senate. Proponents say it would restore and protect fair competition in digital advertising markets dominated by Google and Facebook.
In a statement introducing the bill, Sen. Mike Lee, Utah Republican and chief sponsor, said the bill would free the internet from online monopolies.
“This lack of competition in digital advertising means that monopoly rents are being imposed upon every website that is ad-supported and every company — small, medium or large — that relies on internet advertising to grow its business,” Mr. Lee said. “It is essentially a tax on thousands of American businesses, and thus a tax on millions of American consumers.”
The bill has not been scheduled for consideration in committee in either chamber. It faces resistance from wary lawmakers, particularly those from California, which is home to Apple, Google parent company Alphabet and Facebook parent company Meta, and scores of scores of other technology players.
It also marks the latest legislative attempt by Congress to assert federal control over the flourishing and largely ungoverned online industry.
The bill would ban large digital advertising companies such as Google from owning more than one part of the digital ad “ecosystem,” and it would block them from playing dual roles in the advertising process.
Large companies, namely Google, would have to end their ownership of both supply-side platforms and demand-side platforms that have helped them generate significant revenue.
In 2021, Alphabet earned more than $209 billion from advertising and Meta made roughly $115 billion from advertising.
Other major tech companies also would be affected.
Mr. Lee said the legislation likely would require Google and Facebook to “divest significant portions” of their advertising businesses, which account for large portions of their ad revenue.
Amazon also could be required to make divestments, and the bill would “impact” Apple’s developing third-party advertising business, Mr. Lee said.
Mr. Lee said Google, Facebook and other Big Tech companies need regulation because they have used massive troves of user data to establish a monopoly over digital advertising that blocks competition and hurts consumers.
The measure has attracted a handful of co-sponsors.
Support to rein in Big Tech cuts across party lines.
The bill is co-sponsored by Sens. Ted Cruz, Texas Republican, Amy Klobuchar, Minnesota Democrat, and Richard Blumenthal, Connecticut Democrat.
An identical measure was introduced Thursday in the House. It was sponsored by Rep. Ken Buck, a Colorado Republican who has long sought to bring massive tech companies to heel.
Support in the House also spans the political spectrum. Mr. Buck is a member of the conservative House Freedom Caucus. The co-sponsors include Rep. Pramila Jayapal of Washington, who chairs the Democrats’ Progressive Caucus.
Reps. Matt Gaetz, Florida Republican, and David Cicilline, Rhode Island Democrat, are also sponsors.
“The online advertising market is monopolized, opaque and rigged in favor of just two companies: Google and Facebook,” Mr. Cicilline said.
Despite the broad political support, passage or even floor consideration of the legislation is far from guaranteed. Lawmakers in both parties have opposed government controls over flourishing online platforms.
Previous attempts in Congress to implement antitrust reform in the tech industry haven’t gone far, and the legislative window this year is closing quickly.
Congress is expected to adjourn by August for a long summer recess. When lawmakers return, the midterm elections will be just a few months away. They typically steer clear of major legislation before facing voters at the polls.
Among the major bills Mr. Buck, Ms. Klobuchar and other proponents hope to pass this Congress is the American Innovation and Choice Online Act, which would ban online businesses such as Amazon and Facebook from giving preference to their services over other advertisers.
The bill has advanced in the Senate and House but has yet to receive a floor vote in either chamber. Other lawmakers in both parties say the bill is too broad and could hurt consumers.
Big Tech has enjoyed a firewall of protection from the House and Senate delegation of lawmakers from California.
“While I share the desire to reform digital markets and increase competition, as drafted, the bills fall short and will create more harm than good for American consumers and the U.S. economy,” Rep. Zoe Lofgren, a California Democrat, said in a statement opposing the American Choice and Innovation Online Act and a suite of bills advanced earlier this year to curb tech monopolies.
The tech giants spent millions of dollars lobbying Congress to block federal control over their industry. They argue that government regulations would cause a wide range of problems that would hurt advertisers and consumers.
Kent Walker, global affairs president and chief legal officer for Google, said in a January blog post that legislation to check Big Tech could stifle innovation by requiring companies to get government approval before starting programs. Consumers could end up with less-helpful apps, lower-quality search results and less security from cyberattacks.
“Antitrust law is about ensuring that companies are competing hard to build their best products for consumers,” Mr. Walker said. “But the vague and sweeping provisions of these bills would break popular products that help consumers and small businesses, only to benefit a handful of companies who brought their pleas to Washington.”