ANNOUNCEMENT: Senate Bill Would Stymie Progress in AdTech

PORTLAND, Ore. (May 19, 2022) — Legislation introduced today in the U.S. Senate to address alleged “conflicts of interest” in the digital-advertising market would instead threaten to halt decades of technological innovation that have benefited both advertisers and publishers, scholars with the International Center for Law & Economics (ICLE) warn.

Dubbed the Competition and Transparency in Digital Advertising Act, the bill would impose a host of new duties on firms with more than $5 billion in digital-advertising revenue and mandate that firms with more than $20 billion in digital-advertising revenue may not participate in the market as any combination of a buy-side broker, sell-side broker, seller of digital-advertising space, and/or owner of a digital-advertising exchange.

The following statement may be attributed to ICLE President and Founder Geoffrey Manne:

“This legislation fundamentally misunderstands the role that intermediaries have played in creating a market that matches advertisers and websites automatically and that serves users the most relevant ads. This revolution in targeted advertising has allowed websites to monetize their products without having to charge user fees, allowing people to access entertaining and informative content for free. Platforms like digital-ad exchanges have incentive to balance costs and benefits to participants on all sides of the transaction. To the extent that they fail to do that efficiently or effectively, digital advertising is a market with low barriers to entry and new competitors emerge all the time. This legislation threatens to take us back to the old days of massive inefficiency in the advertising industry, and of consumers being inundated with marketing pitches for goods and services they would never want.”

We also recommend reading this recent Wall Street Journal op-ed by ICLE Academic Affiliate Todd Henderson and this blog post on Truth on the Market by Senior Scholar Eric Fruits. Journalists interested in interviewing ICLE scholars about the legislation or the law & economics of digital advertising should contact ICLE Editor-in-Chief R.J. Lehmann at [email protected] or 908-265-5272.