Todd Henderson Finds Inefficiencies in Proposed Legislation to Regulate Online Ad Market

Don’t Try to Regulate Google Ads

Sen. Mike Lee of Utah is poised to introduce legislation that would forbid Google and other tech giants that build and operate digital advertising exchanges from owning the tools that help buyers and sellers of online advertising. Not only is this bad policy, but it is based on the faulty premise that advertising markets are analogous to securities markets.

Behind the proposed legislation is the argument, put forward by some legal scholars, that Google manipulates advertising markets in ways that are similar to insider trading or front-running in the stock market. If the New York Stock Exchange can’t both operate the stock exchange and participate in it, the argument goes, Google should not be permitted to do the same in its ad exchange.

But ads aren’t stocks, and conflating them leads lawmakers astray.

Read more at The Wall Street Journal