Working in public affairs in the ad tech industry, events related to my work don’t often pop up in the general newsfeed or on the evening news - but earlier this month was different. The EU’s competition regulator filedantitrust chargesagainst Google’s ad tech practices, even mentioning a possible remedy of forcing the tech giant to sell off parts of their advertising business. This could be a game changer, enabling small players to compete with the big players on a leveled-playing field. I believe that we will have fairer competition going forward, one where smaller companies will not run the risk of getting closed out.
In January, the U.S. Department of Justicefiled a similar lawsuit. And while I don’t want to dive into the nitty gritty details of either case, it’s worth looking at what is happening in terms of competition policies and antitrust in online advertising - and how this shakes up the ad tech world.
The new wave of regulation
When thinking about regulation over the last few years, privacy law (and especially the four magic letters G - D - P - R) kept people in the online advertising world very busy (and some awake at night, I assume). This will not change any time soon, but there’s another regulatory framework that’s becoming more prominent in the advertising industry: competition and antitrust.
Europe’s new competition law for the digital sector, theDigital Markets Act(or “DMA”, in short), puts forth new rules for dominant online platforms with significant market power. The new ruleset also comes with significant implications for the online advertising industry, introducing stricter regulations, transparency requirements and restrictions on certain practices, like how data is collected and combined or cross-used. On the latter topic, I recently took part in ahearing at the European Commission(see video below), making the argument that the DMA provides some opportunities to give users (back) control over their online experience.
While the DMA was formally adopted in the fall of last year, the crucial implementation phase of the law is happening right now as more concrete details of how the legal framework applies are being put forward. I believe the DMA has the potential to enact some best practices to ensure online advertising will become more user-focused and private.
Meanwhile, the U.S. is pushing several similar initiatives. A bipartisan bill called “The AMERICA Act” - short forAdvertising Middlemen Endangering Rigorous Internet Competition Accountability Act- aims to increase competition in digital advertising (kudos to the person who came up with the abbreviation!). The law is seeking to essentially prohibit ad platforms earning in excess of $20 billion in digital transactions from owning several parts of the digital advertising chain. Based on what I heard from people working on the Hill, it seems unlikely that the bill will pass into law - but if it does, the legislation would likely force some ad tech giants to sell parts of their businesses. In this context, the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights recently held ahearing to discuss competition questions in the ad tech field.
So, what happens next?
We’ll have to wait and see how the current antitrust investigations play out in the EU and U.S., how exactly the DMA will impact online advertising, and even if the AMERICA Act will become enforceable law. Regardless of the uncertainty, an undeniable emerging trend is that competition policy and antitrust are the new tools legislators and regulators are using to scrutinize ad tech - and, I’m pretty sure, this framework will continue to shake things up in the online advertising industry.
I welcome these regulations if they benefit the users in the long run. Better competition rules provide value if they ensure users continue to have more choices and control. More choices can lead to better services and innovation and ultimately benefit the entire ecosystem.
Cornelius Witt is Director Global Public Affairs at eyeo