Bipartisan Senate Bill Introduced to Address Market Dominance of Platforms in Ad Tech

On May 19, Sens. Mike Lee (R-UT), Amy Klobuchar (D-MN), Ted Cruz (R-TX), and Richard Blumenthal (D-CT) introduced a new bill that would ban ad intermediary companies that process more than $20 million in digital ad transactions annually from engaging in ad sales. The legislation, the Competition and Transparency in Digital Advertising Act (S.4258), aims to increase competition in digital advertising by eliminating conflicts of interest that have given the large platforms with market dominance certain advantages in ad auctions. Bill sponsors akin the restrictions and requirements of the bill to those imposed on electronic trading in the financial sector. A guidance document accompanying the bill introduction can be found here.

Some privacy experts who have weighed in on the bill are concerned that further breaking up the ad bidstream increases data privacy risks due to heightened opportunity for leakages.The bill does require that the ad tech platform maintain a “unique and persistent identifier that identifies each unique digital advertising space for sale,” and the ID could track “all bids received. The bill also attempts to head off abuses of ad IDs, by codifying that ad tech vendors that use the system are barred from using data from the auctions to identify consumers. One of the longtime concerns of data in bidstream is that it was susceptible to fingerprinting. Additional privacy concerns could be addressed via committee or floor amendments if the bill advances.

For agencies, a breakup of the larger ad tech players could mean necessary shifts toward alternative ad tech stacks. Since both parties and chambers in Congress seem united in their concerns over the growing influence and monopoly power of the large social media platforms, there is a chance this bill could pass this Congress. The 4As Government Relations team will continue to monitor the bill’s progress through the legislature and share updates with members if it progresses.

For questions about the bill or other 4As efforts on federal privacy legislation, please contact Alison Pepper.