Select Page

New Congressional Effort to Crack Down on Big Tech



By Krisztina Pusok and Tirzah Duren,  American Consumer Institute

The past year has seen multiple attempts by Congressional leaders to pass antitrust bills that penalize big tech companies for their size, completely disregarding business conduct or the effects on consumers. The latest antitrust bill to be introduced comes from Republican Senator Mike Lee of Utah, a known critic of big tech who has claimed large tech companies “divide the nation, undermine fundamental liberties and distort the market.” Not only is this bill bad news for consumers, it’s bad news for the millions of small businesses that depend on access to tech platforms to operate.

The proposed Competition, and Transparency in Digital Marketing Act, also joined by Senators Amy Klobuchar (D-MN), Ted Cruz (R-TX), and Richard Blumenthal (D-CT), seeks to prohibit companies with more than $20 billion in digital ad revenue from running a ‘digital advertising exchange.’ Additionally, the legislation places burdens on firms with revenue over $5 billion, such as requirements to forgo their best interests in favor of their consumers and data sharing and transparency requirements.

In a press release announcing the bill, Senator Lee claimed, “companies like Google and Meta have been able to exploit their unprecedented troves of detailed user data to obtain vice grip-like control over digital advertising, amassing power on every side of the market and using it to block competition and take advantage of their customers.” While the bill does not explicitly mention Google or other targeted companies, analysts widely believe the provisions have been crafted to force structural changes on large companies in the digital advertising space and likely require some companies like Google and Meta to sell off parts of their business.

Digital advertising platforms like Google Ads are indeed profitable, generating $61.2 billion in revenue during the fourth quarter of 2020, but they are a vital platform for small businesses. Google has estimated that for every dollar spent on Google Ads, small companies “receive $8 in profit.” Such a substantial return on investment is only possible because Google advertising platforms offer a streamlined system and reach over 5.4 billion users each day, allowing small businesses to access more customers than they would otherwise.

Restructuring the digital advertising market could ultimately cut smaller businesses off from this vital revenue stream, limiting their ability to invest in new products, employ more staff, and scale their operations. In fact, 90% of businesses believe “online advertising has provided my business with an affordable option to launch and grow my business,” and 86% see access to digital advertising as necessary to “business survival and growth.”

The bill also rests on the faulty assumption that the digital advertising market is anticompetitive. While Google Ads is the largest provider, it only controls 28.6% of the market. Facebook currently has 23.8% of the market share, followed by Amazon with 11.3%. In total, the three largest companies only control about 63.7% of the market. This fractured marketplace, which does not mirror a monopoly or even an oligopoly, shows that businesses have considerable choice in where to purchase digital advertisements.

Unfortunately, Senator Lee’s Competition and Transparency in Digital Marketing Act is just another attempt to legislate against big tech companies, the dangers are clear: it specifically aims to use antitrust law to punish a handful of large corporations, solely focusing only on a company’s size, not its conduct or its effects on consumers. Forcing these changes will not only hurt small businesses by cutting them off from their consumers and limiting their ability to innovate and grow, but would also leave consumers with fewer and more costly choices.

Rather than penalizing big tech companies for supporting smaller businesses and allowing them to be successful, Congress should re-focus their efforts on real issues that matter to voters, and not engage in an anti-consumer and self-defeating battle against big tech.


Krisztina Pusok is the Director of Policy and Research, Tirzah Duren is a Policy Analyst at the American Consumer Institute, a nonprofit educational and research organization. You can follow the institute on Twitter @ConsumerPal.