[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 4258 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  2d Session
                                S. 4258

 To prevent conflicts of interest and promote competition in the sale 
                  and purchase of digital advertising.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                 May 19 (legislative day, May 17), 2022

  Mr. Lee (for himself, Ms. Klobuchar, Mr. Cruz, and Mr. Blumenthal) 
introduced the following bill; which was read twice and referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To prevent conflicts of interest and promote competition in the sale 
                  and purchase of digital advertising.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Competition and Transparency in 
Digital Advertising Act''.

SEC. 2. DIGITAL ADVERTISING TRADING TRANSPARENCY AND COMPETITION.

    The Clayton Act (15 U.S.C. 12 et seq.) is amended by inserting 
after section 8 (15 U.S.C. 19) the following:

``SEC. 8A. COMPETITION AND TRANSPARENCY IN DIGITAL ADVERTISING.

    ``(a) Definitions.--In this section:
            ``(1) Brokerage customer.--The term `brokerage customer' 
        means a person who has purchased or sold digital 
        advertisements, or directly related goods or services, through 
        a buy-side brokerage or a sell-side brokerage.
            ``(2) Buy-side brokerage.--The term `buy-side brokerage' 
        means a person in the business of effecting transactions on 
        digital advertising exchanges, including by offering software 
        or services that assist in serving or displaying digital 
        advertisements, for other buyers.
            ``(3) Digital advertisement.--The term `digital 
        advertisement' means an advertisement that is served 
        electronically over a computer network, including the internet.
            ``(4) Digital advertising exchange.--The term `digital 
        advertising exchange' means a person who constitutes, 
        maintains, or provides a marketplace for or facilitates 
        bringing together buyers and 1 or more sellers of digital 
        advertisements, or for otherwise performing with respect to 
        digital advertising the functions commonly performed by a 
        digital advertising marketplace.
            ``(5) Digital advertising revenue.--The term `digital 
        advertising revenue' means the greater of--
                    ``(A) global revenue derived from or directly 
                related to the operation of a digital advertising 
                exchange, a buy-side brokerage, or a sell-side 
                brokerage; or
                    ``(B) the greater of--
                            ``(i) the sum of the clearing prices of all 
                        digital advertisements bought or sold from or 
                        through a digital advertising exchange;
                            ``(ii) the total value of the gross 
                        advertising spending managed by a buy-side 
                        brokerage; or
                            ``(iii) the total value of the gross 
                        advertising sales managed by a sell-side 
                        brokerage.
            ``(6) Divestiture deadline.--The term `divestiture 
        deadline' means the later of--
                    ``(A) 30 days after the date on which the Attorney 
                General approves or denies a required divestiture; or
                    ``(B) 30 days after the expiration of any 
                applicable waiting period under section 7A.
            ``(7) Effective date.--The term `effective date' means the 
        date that is 1 year after the date of enactment of this 
        section.
            ``(8) Own.--The term `own' means to own, operate, or 
        control, directly or indirectly, in whole or in part.
            ``(9) Person.--The term `person' includes--
                    ``(A) any subsidiary of an entity; and
                    ``(B) any corporate parent of an entity.
            ``(10) Required divestiture.--The term `required 
        divestiture'--
                    ``(A) means a divestiture, sale, or other 
                transaction undertaken to comply with any provision of 
                this Act; and
                    ``(B) does not include any action required by a 
                court of the United States.
            ``(11) Sell-side brokerage.--The term `sell-side brokerage' 
        means a person in the business of effecting transactions on 
        digital advertising exchanges, including by offering software 
        or services that assist in serving or displaying digital 
        advertisements, for other sellers.
            ``(12) Third-party.--The term `third-party' means, for each 
        person subject to this Act, an entity that--
                    ``(A) neither owns nor is owned by that person; and
                    ``(B) is not affiliated with the person through 
                direct or indirect ownership or control.
    ``(b) Prohibitions.--No person with more than $20,000,000,000 (as 
adjusted each year on January 1 by an amount equal to the percentage 
increase, if any, in the Consumer Price Index, as determined by the 
Department of Labor or its successor) in digital advertising revenue 
during the previous calendar year may, after the effective date--
            ``(1) own a digital advertising exchange if that person 
        owns either a sell-side brokerage or a buy-side brokerage, or 
        is a seller of digital advertising space;
            ``(2) own a sell-side brokerage if that person owns a buy-
        side brokerage; or
            ``(3) own a buy-side brokerage or a sell-side brokerage if 
        that person is also a buyer or seller of digital advertising 
        space.
    ``(c) Requirements.--Any person with more than $5,000,000,000 (as 
adjusted each year on January 1 by an amount equal to the percentage 
increase, if any, in the Consumer Price Index, as determined by the 
Department of Labor or its successor) in digital advertising revenue 
during the previous calendar year shall be subject to, as of the 
effective date, the following requirements:
            ``(1) Best interest duty.--A buy-side brokerage or sell-
        side brokerage shall, in the course of providing services as a 
        brokerage, use reasonable diligence, care, and skill to act in 
        the best interests of their brokerage customers, and may not 
        put their own interests ahead of those of their brokerage 
        customers.
            ``(2) Best execution duty.--A buy-side brokerage or sell-
        side brokerage shall seek the most favorable terms reasonably 
        available under the circumstances for each order transaction of 
        the brokerage customer.
            ``(3) Transparency requirements.--
                    ``(A) In general.--Upon written request from a 
                brokerage customer, a buy-side brokerage or sell-side 
                brokerage shall supply to that brokerage customer, 
                within a reasonable time, information sufficient to 
                permit the brokerage customer to verify compliance of 
                the brokerage with its obligations under paragraphs (1) 
                and (2).
                    ``(B) Contents.--The information described in 
                subparagraph (A) shall include, if requested and to the 
                extent such information is collected by the brokerage 
                in the ordinary course of business--
                            ``(i) in the case of a sell-side brokerage 
                        providing information to a sell-side brokerage 
                        customer--
                                    ``(I) a unique and persistent 
                                identifier that identifies each unique 
                                digital advertising space for sale;
                                    ``(II) for each identifier 
                                described in subclause (I), all bids 
                                received, and, for each bid received, 
                                the bid submitted to the digital 
                                advertising exchange on behalf of the 
                                buy-side brokerage customer, the 
                                winning price, the uniform resource 
                                locator or other property identifier at 
                                the lowest level of granularity, the 
                                identity of the digital advertising 
                                exchange or other digital advertising 
                                venue returning the bid, date, time 
                                that the bid response was received in 
                                microseconds or a lower level of 
                                granularity, web domain associated with 
                                the advertising creative, the 
                                advertising creative size and format, 
                                and whether the bid won the seller's 
                                impression;
                                    ``(III) the nature of any data 
                                collected or derived from the brokerage 
                                customer or any user or customer of the 
                                brokerage customer, and the ways in 
                                which that data is used by the sell-
                                side brokerage;
                                    ``(IV) the order or bid routing 
                                practices or processes, including any 
                                material exceptions to the standard 
                                practice of the brokerage; and
                                    ``(V) the source and nature of any 
                                compensation paid or received in 
                                connection with transactions; and
                            ``(ii) in the case of a buy-side brokerage 
                        providing information to a buy-side brokerage 
                        customer--
                                    ``(I) all bids won by the buy-side 
                                brokerage customer, and for each bid 
                                won, the maximum allowed bid of the 
                                advertiser, if any, the uniform 
                                resource locator or other property 
                                identifier at the lowest level of 
                                granularity, date, the digital 
                                advertising exchange, the web domain 
                                associated with the advertising 
                                creative, the advertising creative size 
                                and format, the winning price, the bid 
                                submitted to the digital advertising 
                                exchange on behalf of the buy-side 
                                brokerage customer, and, if possible, 
                                whether the ad served and whether the 
                                ad rendered;
                                    ``(II) the order or bid routing 
                                practices or processes; and
                                    ``(III) the source and nature of 
                                any compensation paid or received in 
                                connection with transactions.
                    ``(C) Retention of records.--Brokerages shall 
                retain the records specified in subparagraph (B), where 
                applicable and when collected in the ordinary course of 
                business, until provided to a requesting brokerage 
                customer but not longer than 90 days. Brokerages shall 
                retain billing information for their brokerage 
                customers for not fewer than 12 months.
                    ``(D) User privacy.--
                            ``(i) In general.--When providing 
                        information to a brokerage customer in response 
                        to a request authorized by subparagraph (A), 
                        the brokerage shall, to the greatest extent 
                        possible consistent with the purpose of 
                        subparagraph (A), anonymize, hash, or otherwise 
                        render the information incapable of being tied 
                        to an individual web user.
                            ``(ii) Prohibiting tracking.--A brokerage 
                        customer may not use data or information 
                        received in response to a request made under 
                        subparagraph (A) for any purpose other than--
                                    ``(I) verifying compliance of a 
                                brokerage with its obligations under 
                                paragraphs (1) and (2); or
                                    ``(II) bringing an action under 
                                subsection (d)(3).
            ``(4) Firewalls.--
                    ``(A) Buy-side and sell-side brokerages.--Buy-side 
                brokerages and sell-side brokerages shall establish, 
                maintain, and enforce written policies and procedures 
                reasonably designed to ensure compliance with the 
                obligations under this subsection.
                    ``(B) Other persons.--Persons not subject to 
                prohibitions under subsection (b) shall establish, 
                maintain, and enforce written policies and procedures 
                reasonably designed to ensure that their buy-side 
                brokerage, sell-side brokerage, digital advertising 
                exchange, and role as a buyer or seller of digital 
                advertising, where applicable, operate separate and 
                independent from one another and transact business at 
                arm's length.
            ``(5) Fair access duty.--A digital advertising exchange 
        shall provide every buyer and seller in the exchange fair 
        access, including with respect to operations of the exchange, 
        co-location, any technology systems or data, information 
        related to transactions, service, or products offered, exchange 
        processes, and functionality.
            ``(6) Time synchronization.--A digital advertising 
        exchange, buy-side brokerage, or sell-side brokerage shall--
                    ``(A) synchronize its business clocks at a minimum 
                to within a 2 milliseconds tolerance of the time 
                maintained by the atomic clock of the National 
                Institute of Standards and Technology; and
                    ``(B) maintain the synchronization described in 
                subparagraph (A).
            ``(7) Data ownership.--All records pertaining to an order 
        solicited or submitted by a brokerage customer, and the 
        subsequent result of that order, shall remain the property of 
        that customer, including any bids solicited from or submitted 
        to any digital advertising exchange, unless the information is 
        otherwise publicly available.
            ``(8) Routing practices disclosure.--
                    ``(A) In general.--Every sell-side brokerage and 
                buy-side brokerage shall--
                            ``(i) make publicly available for each 
                        calendar quarter a report on the order routing 
                        practices of the sell-side brokerage or buy-
                        side brokerage, as applicable, for digital 
                        advertisements during that quarter broken down 
                        by calendar month; and
                            ``(ii) retain the report described in 
                        clause (i) posted on an internet website that 
                        is free and readily accessible to the public 
                        for 3-year period beginning on the date on 
                        which the report is posted.
                    ``(B) Format.--Reports made available pursuant to 
                subparagraph (A) shall--
                            ``(i) be rendered in a format that makes 
                        the reports readily informative to the average 
                        brokerage customer; and
                            ``(ii) include for the 10 venues to which 
                        the largest number of total bid requests or bid 
                        responses were routed for execution and for any 
                        venue to which 5 percent or more of bid 
                        requests or bid responses were routed for 
                        execution--
                                    ``(I) the total number of bids 
                                routed;
                                    ``(II) the total number of bids 
                                executed;
                                    ``(III) the fill rate of bids;
                                    ``(IV) the average net execution 
                                fee or rebate per 1,000 impressions;
                                    ``(V) the average time in 
                                milliseconds between when a bid request 
                                is sent and when a bid response is 
                                received; and
                                    ``(VI) the value and form of any 
                                compensation given in exchange for 
                                routing or execution.
            ``(9) Certification.--A digital advertising exchange, buy-
        side brokerage, or sell-side brokerage shall certify to the 
        Attorney General on an annual basis that the digital 
        advertising exchange has complied with the requirements under 
        this subsection.
    ``(d) Enforcement.--
            ``(1) Attorney general and state attorneys general.--
                    ``(A) In general.--The Attorney General and State 
                attorneys general may bring an action on behalf of 
                persons in the United States injured in their business 
                or property by reason of any violation of this Act in 
                any district court of the United States in the district 
                in which the defendant resides or is found or has an 
                agent, without respect to the amount in controversy, 
                and shall--
                            ``(i) in a case brought by the Attorney 
                        General or a State attorney general, be 
                        entitled to injunctive relief; and
                            ``(ii) in a case brought by the Attorney 
                        General, recover damages sustained by such 
                        persons.
                    ``(B) Damages.--
                            ``(i) In general.--The court may award 
                        under this subsection, pursuant to a motion by 
                        the Attorney General promptly made, simple 
                        interest on actual damages in accordance with 
                        the requirements under subparagraph (A).
                            ``(ii) No duplicative award.--A court may 
                        not award any damages under this subparagraph 
                        that are duplicative of damages awarded before 
                        the date of the award under this subparagraph 
                        in a separate civil action pertaining to the 
                        same conduct and injured party.
                            ``(iii) Payments.--A court awarding damages 
                        to a person in a civil action after the date of 
                        an award of damages under this subsection that 
                        would be duplicative of damages awarded to the 
                        Attorney General on behalf of the person shall 
                        direct that such damages shall first be paid by 
                        the Attorney General from amounts in the Fund 
                        and, to the extent such damages are not fully 
                        paid from amounts in the Fund, shall be paid by 
                        the defendant.
                    ``(C) Antitrust consumer damages fund.--
                            ``(i) In general.--There is established in 
                        the Treasury of the United States a fund to be 
                        known as the `Antitrust Consumer Damages Fund' 
                        (in this subsection referred to as the `Fund'), 
                        which shall consist of amounts deposited under 
                        clause (ii).
                            ``(ii) Deposits and availability.--
                        Notwithstanding section 3302 of title 31, 
                        United States Code, any amounts received by the 
                        Attorney General under an award under this 
                        subsection--
                                    ``(I) shall be deposited in the 
                                Fund; and
                                    ``(II) shall be available to the 
                                Attorney General, without further 
                                appropriation, for distribution to 
                                persons in the United States harmed by 
                                the applicable violation of the Sherman 
                                Act (15 U.S.C. 1 et seq.).
                            ``(iii) Deposits into general fund.--
                        Effective on the day after the date that is 10 
                        years after the date on which an award is 
                        received under this paragraph, the unobligated 
                        balances in the Fund of amounts that were 
                        received under the award are rescinded and 
                        shall be deposited in the general fund of the 
                        Treasury.
            ``(2) Divestiture enforcement.--The Attorney General may 
        bring an action on behalf of the United States in any district 
        court of the United States in the district in which the 
        defendant resides or is found or has an agent, and may obtain 
        injunctive relief upon showing by a preponderance of the 
        evidence that the defendant has
                    ``(A) violated a requirement of subsection (e); or
                    ``(B) undertaken a required divestiture that 
                unnecessarily harms or threatens competition in any 
                market.
            ``(3) Private right of action.--
                    ``(A) In general.--A brokerage customer harmed by a 
                knowing violation of subsection (c) by a person with 
                more than $20,000,000,000 (as adjusted each year on 
                January 1 by an amount equal to the percentage 
                increase, if any, in the Consumer Price Index, as 
                determined by the Department of Labor or its successor) 
                in digital advertising revenue during the previous 
                calendar year may bring a civil action in an 
                appropriate court to obtain injunctive relief, where 
                appropriate, and recover damages in the amount of the 
                greater of--
                            ``(i) $1,000,000 for each month in which a 
                        violation of this Act occurred and reasonable 
                        attorney's fees; or
                            ``(ii) actual damages and reasonable 
                        attorney's fees.
                    ``(B) No class action waiver.--No person covered by 
                this Act may require a class action waiver for claims 
                under this Act, including for arbitration.
                    ``(C) Timing.--A civil action for a violation of 
                subsection (b) may be brought at any time after the 
                later of--
                            ``(i) the expiration of any applicable 
                        divestiture deadline; or
                            ``(ii) the expiration of the deadline in 
                        subsection (e)(1) if no filing has been made.
    ``(e) Divestiture.--
            ``(1) Filing.--Any agreement or other document setting out 
        the terms of a required divestiture shall be filed with the 
        Attorney General not later than the later of--
                    ``(A) the effective date; or
                    ``(B) the earlier of--
                            ``(i) 30 days after the date on which an 
                        agreement making a required divestiture under 
                        this Act is executed; or
                            ``(ii) 180 days after meeting the criteria 
                        specified in any paragraph of subsection (b).
            ``(2) Attorney general review.--The Attorney General shall 
        approve a required divestiture upon a showing by the person 
        making the divestiture that the terms of the divestiture, 
        including the qualifications of any counter parties thereto, 
        will not unnecessarily harm or threaten competition in any 
        market.
            ``(3) Timing.--
                    ``(A) In general.--The Attorney General shall grant 
                or deny approval of a required divestiture, unless 
                agreed to by the parties, no later than the later of--
                            ``(i) 60 days after receipt of all 
                        information obtained pursuant to subparagraph 
                        (5); or
                            ``(ii) 60 days after receipt of the filing 
                        made under subparagraph (1).
                    ``(B) Completion.--A divestiture shall be completed 
                not later than the divestiture deadline.
            ``(4) Guidance.--The Attorney General shall--
                    ``(A) not later than 120 days after the date of 
                enactment of this section, issue guidance on the 
                divestiture process under this subsection and the 
                certification requirement under subsection (c)(6); and
                    ``(B) update the guidance described in subparagraph 
                (A) as the Attorney General determines is appropriate.
            ``(5) Compulsory process.--The Attorney General may request 
        or issue a civil investigative demand under section 3 of the 
        Antitrust Civil Process Act (15 U.S.C. 1312) for documents from 
        any person involved in a required divestiture to determine the 
        competitive effects of the divestiture.
    ``(f) Rules of Construction.--Nothing in this section shall--
            ``(1) prohibit a person from--
                    ``(A) selling their own inventory of advertising 
                space if--
                            ``(i) the inventory was not acquired solely 
                        for the purposes of resale, except to monetize 
                        the person's own content or intellectual 
                        property; and
                            ``(ii) the person does not also assist a 
                        third-party in the sale or purchase of 
                        advertising space, other than purchasing 
                        advertising space from that person; or
                    ``(B) buying inventory to market the products or 
                services of the person;
            ``(2) abridge or supersede any provision of or rules issued 
        pursuant to section 7A;
            ``(3) prohibit a person from, consistent with the antitrust 
        laws, entering into a joint venture or other collaboration to 
        prevent harm from spam, fraud, or other forms of abuse in 
        digital advertising; or
            ``(4) require the disclosure of information if such 
        disclosure would violate a law of the United States or a 
        foreign country.''.
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