Texas 2025 - 89th Regular

Texas House Bill HB5480 Compare Versions

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1	1		By: Little H.B. No. 5480
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4	6		A BILL TO BE ENTITLED
5	7		AN ACT
6	8		relating to competition and transparency in digital advertising.
7	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	10		SECTION 1. Title 2, Business & Commerce Code, is amended by
9	11		adding Chapter 18 to read as follows:
10	12		CHAPTER 18. COMPETITION AND TRANSPARENCY IN DIGITAL ADVERTISING
11	13		SUBCHAPTER A. GENERAL PROVISIONS
12	14		Sec. 18.001. DEFINITIONS. In this chapter:
13	15		(1) "Brokerage customer" means a person who purchases
14	16		or sells digital advertisements, or directly related goods or
15	17		services, through a buy-side brokerage or a sell-side brokerage.
16	18		(2) "Buy-side brokerage" means a person in the
17	19		business of effecting transactions on digital advertising
18	20		exchanges, including by offering software or services that assist
19	21		in serving or displaying digital advertisements, for other buyers.
20	22		(3) "Digital advertisement" means an advertisement
21	23		that is served electronically over a computer network, including
22	24		the Internet.
23	25		(4) "Digital advertising exchange" means a person who
24	26		constitutes, maintains, or provides a marketplace for or
25	27		facilitates bringing together buyers and one or more sellers of
26	28		digital advertisements, or for otherwise performing with respect to
27	29		digital advertising the functions commonly performed by a digital
28	30		advertising marketplace.
29	31		(5) "Digital advertising revenue" means the greater
30	32		of:
31	33		(A) global revenue derived from or directly
32	34		related to the operation of a digital advertising exchange, a
33	35		buy-side brokerage, or a sell-side brokerage; or
34	36		(B) the largest of:
35	37		(i) the sum of the clearing prices of all
36	38		digital advertisements bought or sold from or through a digital
37	39		advertising exchange;
38	40		(ii) the total value of the gross
39	41		advertising spending managed by a buy-side brokerage; or
40	42		(iii) the total value of the gross
41	43		advertising sales managed by a sell-side brokerage.
42	44		(6) "Divestiture deadline" means the 30th day after
43	45		the date on which the attorney general approves or denies a required
44	46		divestiture.
45	47		(7) "Own" means ownership whether directly or
46	48		indirectly or wholly or partly. The term includes operation or
47	49		control, whether directly or indirectly or wholly or partly.
48	50		(8) "Person" includes:
49	51		(A) a subsidiary of an entity; and
50	52		(B) a corporate parent of an entity.
51	53		(9) "Required divestiture" means a divestiture, sale,
52	54		or other transaction undertaken to comply with this chapter. The
53	55		term does not include an action required by a state or federal
54	56		court.
55	57		(10) "Sell-side brokerage" means a person in the
56	58		business of effecting transactions on digital advertising
57	59		exchanges, including by offering software or services that assist
58	60		in serving or displaying digital advertisements, for other sellers.
59	61		(11) "Third party," for a person subject to this
60	62		chapter, means an entity that:
61	63		(A) does not own or is not owned by that person;
62	64		and
63	65		(B) is not affiliated with that person through
64	66		direct or indirect ownership or control.
65	67		Sec. 18.002. CONSTRUCTION OF CHAPTER. This chapter may not
66	68		be construed to:
67	69		(1) prohibit a person from:
68	70		(A) selling the person's own inventory of
69	71		advertising space if:
70	72		(i) the inventory was not acquired solely
71	73		for resale purposes, except to monetize the person's own content or
72	74		intellectual property; and
73	75		(ii) the person does not also assist a third
74	76		party in the sale or purchase of advertising space, other than
75	77		purchasing advertising space from that person; or
76	78		(B) buying inventory to market the products or
77	79		services of the person;
78	80		(2) prohibit a person from, consistent with antitrust
79	81		law, entering into a joint venture or other collaboration to
80	82		prevent harm from spam, fraud, or other forms of abuse in digital
81	83		advertising; or
82	84		(3) require the disclosure of information if the
83	85		disclosure would violate a law of this state, the United States, or
84	86		a foreign country.
85	87		SUBCHAPTER B. PROHIBITIONS AND REQUIREMENTS
86	88		Sec. 18.051. PROHIBITED PRACTICES. A person with more than
87	89		$20 billion in digital advertising revenue for the preceding
88	90		calendar year may not:
89	91		(1) own a digital advertising exchange if that person
90	92		owns either a buy-side brokerage or a sell-side brokerage or is a
91	93		seller of digital advertising space;
92	94		(2) own a sell-side brokerage if that person owns a
93	95		buy-side brokerage; or
94	96		(3) own a buy-side brokerage or a sell-side brokerage
95	97		if that person is also a buyer or seller of digital advertising
96	98		space.
97	99		Sec. 18.052. GENERAL REQUIREMENTS. A person that is a
98	100		buy-side brokerage or sell-side brokerage with more than $5 billion
99	101		in digital advertising revenue for the preceding calendar year
100	102		shall:
101	103		(1) in the course of providing services as a
102	104		brokerage, use reasonable diligence, care, and skill to act in the
103	105		best interest of the brokerage customer and may not put the
104	106		brokerage's own interest ahead of the interest of the brokerage
105	107		customer; and
106	108		(2) seek the most favorable terms reasonably available
107	109		under the circumstances for each order transaction of the brokerage
108	110		customer.
109	111		Sec. 18.053. DIGITAL ADVERTISING REVENUE ADJUSTMENT. (a)
110	112		In this section, "consumer price index" means the average over a
111	113		calendar year of the Consumer Price Index for All Urban Consumers
112	114		(CPI-U), U.S. City Average, published monthly by the United States
113	115		Bureau of Labor Statistics, or its successor in function.
114	116		(b) Beginning in 2027, on January 1 of each year, the
115	117		attorney general may adjust the digital advertising revenue amount
116	118		prescribed by Sections 18.051 and 18.052 by an amount equal to the
117	119		percentage increase, if any, in the consumer price index in digital
118	120		advertising revenue for the preceding calendar year.
119	121		(c) The attorney general shall make the determination
120	122		required by this section and may adopt rules related to making that
121	123		determination.
122	124		Sec. 18.054. TRANSPARENCY REQUIREMENTS. (a) On written
123	125		request from a brokerage customer, a buy-side brokerage or
124	126		sell-side brokerage shall provide to the customer, within a
125	127		reasonable time, information sufficient to permit the customer to
126	128		verify the brokerage's compliance with Section 18.052.
127	129		(b) The information disclosed under Subsection (a) must
128	130		include, if requested and to the extent the information is
129	131		collected by the brokerage in the ordinary course of business:
130	132		(1) if a sell-side brokerage is providing information
131	133		to a sell-side brokerage customer:
132	134		(A) a unique and persistent identifier that
133	135		identifies each unique digital advertising space for sale;
134	136		(B) for each identifier described by Paragraph
135	137		(A), all bids received and, for each bid received:
136	138		(i) the bid submitted to the digital
137	139		advertising exchange on behalf of the buy-side brokerage customer;
138	140		(ii) the winning price;
139	141		(iii) the uniform resource locator or other
140	142		property identifier at the lowest level of granularity;
141	143		(iv) the identity of the digital
142	144		advertising exchange or other digital advertising venue returning
143	145		the bid;
144	146		(v) the date and time that the bid response
145	147		was received in microseconds or a lower level of granularity;
146	148		(vi) the web domain associated with the
147	149		advertising creative;
148	150		(vii) the advertising creative size and
149	151		format; and
150	152		(viii) whether the bid won the seller's
151	153		impression;
152	154		(C) the nature of any data collected or derived
153	155		from the brokerage customer or any user or customer of the brokerage
154	156		customer and the ways in which that data is used by the sell-side
155	157		brokerage;
156	158		(D) the order or bid routing practices or
157	159		processes, including any material exceptions to the standard
158	160		practice of the brokerage; and
159	161		(E) the source and nature of any compensation
160	162		paid or received in connection with transactions; and
161	163		(2) if a buy-side brokerage is providing information
162	164		to a buy-side brokerage customer:
163	165		(A) all bids won by the buy-side brokerage
164	166		customer, and for each bid won:
165	167		(i) the maximum allowed bid, if any, of the
166	168		advertiser;
167	169		(ii) the uniform resource locator or other
168	170		property identifier at the lowest level of granularity;
169	171		(iii) the date;
170	172		(iv) the digital advertising exchange;
171	173		(v) the web domain associated with the
172	174		advertising creative;
173	175		(vi) the advertising creative size and
174	176		format;
175	177		(vii) the winning price;
176	178		(viii) the bid submitted to the digital
177	179		advertising exchange on behalf of the buy-side brokerage customer;
178	180		and
179	181		(ix) if possible, whether the advertisement
180	182		served and whether the advertisement rendered;
181	183		(B) the order or bid routing practices or
182	184		processes; and
183	185		(C) the source and nature of any compensation
184	186		paid or received in connection with transactions.
185	187		Sec. 18.055. RETENTION OF RECORDS. (a) A brokerage shall
186	188		retain the records specified in Section 18.054(b), as applicable,
187	189		if collected by the brokerage in the ordinary course of business,
188	190		until the later of:
189	191		(1) the 90th day after the date the data is collected;
190	192		or
191	193		(2) the date the brokerage provides the data to a
192	194		customer in response to a request submitted by that customer under
193	195		Section 18.054(a), if the request was submitted before the 90th day
194	196		after the date the data was collected.
195	197		(b) A brokerage shall retain billing information for a
196	198		brokerage customer until the first anniversary of the collection of
197	199		that information.
198	200		Sec. 18.056. USER PRIVACY. (a) When providing information
199	201		to a brokerage customer in response to a request authorized by
200	202		Section 18.054(a), the brokerage shall, to the greatest extent
201	203		possible consistent with the purpose of this chapter, anonymize,
202	204		hash, or otherwise render the information incapable of being tied
203	205		to an individual Internet user.
204	206		(b) A brokerage customer may not use data or information
205	207		received in response to a request made under Section 18.054(a) for
206	208		any purpose other than:
207	209		(1) verifying the brokerage's compliance with Section
208	210		18.052; or
209	211		(2) bringing an action under Section 18.105.
210	212		Sec. 18.057. POLICIES AND PROCEDURES FOR INTERNAL
211	213		COMPLIANCE. A buy-side brokerage and sell-side brokerage shall
212	214		establish, maintain, and enforce a written policy and procedures
213	215		reasonably designed to ensure compliance with the requirements of
214	216		this subchapter.
215	217		Sec. 18.058. POLICIES AND PROCEDURES FOR EXTERNAL
216	218		COMPLIANCE. A buy-side brokerage, sell-side brokerage, digital
217	219		advertising exchange, or other person when acting as a buyer or
218	220		seller of digital advertising, as applicable, that is not subject
219	221		to the prohibitions under Section 18.051 shall establish, maintain,
220	222		and enforce a written policy and procedures reasonably designed to
221	223		ensure that those persons operate separately from and independently
222	224		of one another and transact business with one another at arm's
223	225		length.
224	226		Sec. 18.059. FAIR ACCESS DUTY. A digital advertising
225	227		exchange shall provide to each buyer and seller in the exchange fair
226	228		access, including access with respect to operations of the
227	229		exchange, colocation, any technology systems or data, information
228	230		related to transactions, service, or products offered, exchange
229	231		processes, and functionality.
230	232		Sec. 18.060. TIME SYNCHRONIZATION. A digital advertising
231	233		exchange, buy-side brokerage, or sell-side brokerage shall
232	234		synchronize and maintain the exchange's or brokerage's business
233	235		clocks at a minimum to within a two-millisecond tolerance of the
234	236		time maintained by the atomic clock of the National Institute of
235	237		Standards and Technology.
236	238		Sec. 18.061. DATA OWNERSHIP. All records pertaining to an
237	239		order solicited or submitted by a brokerage customer, and the
238	240		subsequent result of the order, remain the property of the
239	241		brokerage customer, including any bid solicited from or submitted
240	242		to a digital advertising exchange, unless the information is
241	243		publicly available.
242	244		Sec. 18.062. ROUTING PRACTICES DISCLOSURE. A buy-side
243	245		brokerage or sell-side brokerage shall:
244	246		(1) make publicly available for each calendar quarter
245	247		a report on the order routing practices of the buy-side brokerage or
246	248		sell-side brokerage, as applicable, for digital advertisements
247	249		during that quarter broken down by calendar month; and
248	250		(2) retain the report described by Subdivision (1)
249	251		posted on an Internet website that is free and readily accessible to
250	252		the public until the third anniversary of the date the report is
251	253		posted.
252	254		Sec. 18.063. FORMAT. A report made available under Section
253	255		18.062 must:
254	256		(1) be rendered in a format that is readily
255	257		informative to the average brokerage customer; and
256	258		(2) include for the 10 venues to which the largest
257	259		number of total bid requests or bid responses were routed for
258	260		execution and for any venue to which five percent or more of bid
259	261		requests or bid responses were routed for execution:
260	262		(A) the total number of bids routed;
261	263		(B) the total number of bids executed;
262	264		(C) the fill rate of bids;
263	265		(D) the average net execution fee or rebate per
264	266		1,000 impressions;
265	267		(E) the average time in milliseconds between when
266	268		a bid request is sent and when a bid response is received; and
267	269		(F) the value and form of any compensation given
268	270		in exchange for routing or execution.
269	271		Sec. 18.064. CERTIFICATION. A digital advertising
270	272		exchange, buy-side brokerage, or sell-side brokerage shall
271	273		annually certify to the attorney general that the digital
272	274		advertising exchange has complied with the requirements of this
273	275		subchapter.
274	276		SUBCHAPTER C. ENFORCEMENT
275	277		Sec. 18.101. ENFORCEMENT BY THE ATTORNEY GENERAL. (a) The
276	278		attorney general may bring an action on behalf of persons in this
277	279		state injured in their business or property by a violation of this
278	280		chapter.
279	281		(b) In an action brought under this section, the attorney
280	282		general is entitled to:
281	283		(1) obtain injunctive relief; and
282	284		(2) recover actual damages sustained by the injured
283	285		persons.
284	286		Sec. 18.102. DAMAGES. (a) In an action brought under
285	287		Section 18.101, a court may award on a prompt motion by the attorney
286	288		general simple interest on actual damages awarded under that
287	289		section.
288	290		(b) A court may not award any damages under this subchapter
289	291		that are duplicative of damages awarded before the date of the award
290	292		in a separate civil action pertaining to the same conduct and
291	293		injured party.
292	294		(c) A court awarding damages to a person in a civil action
293	295		after the date of an award of damages under this subchapter that
294	296		would be duplicative of damages awarded to the attorney general on
295	297		behalf of the person shall direct that the damages must first be
296	298		paid by the office of the attorney general from amounts in the
297	299		antitrust consumer damages fund under Section 18.103 and, to the
298	300		extent the damages are not fully paid by the office of the attorney
299	301		general from amounts in that fund, shall then be paid by the
300	302		defendant.
301	303		Sec. 18.103. ANTITRUST CONSUMER DAMAGES FUND. (a) The
302	304		antitrust consumer damages fund is a special fund in the state
303	305		treasury outside the general revenue fund to be administered and
304	306		used by the attorney general for the purposes authorized by this
305	307		chapter.
306	308		(b) Notwithstanding any other law, any amounts received by
307	309		the attorney general under an award under this subchapter shall be
308	310		deposited in the fund and shall be available to the attorney
309	311		general, without further appropriation, for distribution to
310	312		persons harmed by a violation of this chapter.
311	313		(c) Effective on the 10th anniversary of the date on which
312	314		an award is received under Section 18.102, the unobligated balances
313	315		in the fund of amounts that were received under the award are
314	316		rescinded and shall be deposited in the general revenue fund of the
315	317		state treasury.
316	318		Sec. 18.104. DIVESTITURE ENFORCEMENT. The attorney general
317	319		may bring an action on behalf of this state and may obtain
318	320		injunctive relief on showing by a preponderance of the evidence
319	321		that the defendant has:
320	322		(1) violated Section 18.106; or
321	323		(2) undertaken a required divestiture that
322	324		unnecessarily harms or threatens competition in any market in this
323	325		state.
324	326		Sec. 18.105. PRIVATE RIGHT OF ACTION. (a) A brokerage
325	327		customer in this state harmed by a knowing violation of Subchapter B
326	328		may bring an action to obtain injunctive relief, if appropriate,
327	329		and to recover damages in the amount of the greater of:
328	330		(1) $1 million for each month in which a violation of
329	331		Subchapter B occurred and reasonable attorney's fees; or
330	332		(2) actual damages and reasonable attorney's fees.
331	333		(b) No person subject to this chapter may require a class
332	334		action waiver for a claim under this chapter, including for
333	335		arbitration of a claim under this chapter.
334	336		(c) A person harmed by a violation of Section 18.051 may
335	337		bring a civil action for a violation of that section any time after
336	338		the later of:
337	339		(1) the expiration of any applicable divestiture
338	340		deadline; or
339	341		(2) the expiration of the deadline under Section
340	342		18.106 if no filing has been made.
341	343		Sec. 18.106. DIVESTITURE. (a) An agreement or other
342	344		document setting out the terms of a required divestiture must be
343	345		filed with the attorney general not later than the later of:
344	346		(1) the effective date of the agreement or other
345	347		document; or
346	348		(2) the earlier of:
347	349		(A) the 30th day after the date on which an
348	350		agreement making a required divestiture under this chapter is
349	351		executed; or
350	352		(B) the 180th day after meeting a criterion
351	353		specified by Section 18.051.
352	354		(b) The attorney general shall approve a required
353	355		divestiture on a showing by the person making the divestiture that
354	356		the terms of the divestiture, including the qualifications of any
355	357		counterparties to the divestiture, will not unnecessarily harm or
356	358		threaten competition in any market in this state.
357	359		(c) The attorney general shall grant or deny approval of a
358	360		required divestiture, unless agreed to by the parties, not later
359	361		than the later of:
360	362		(1) the 60th day after receipt of all information
361	363		obtained under Subsection (f); or
362	364		(2) the 60th day after receipt of the filing made under
363	365		Subsection (a).
364	366		(d) A divestiture must be completed not later than the
365	367		divestiture deadline.
366	368		(e) The attorney general shall issue and maintain guidance
367	369		on the divestiture process under this section and the certification
368	370		requirement under Section 18.064.
369	371		(f) The attorney general may request or issue a civil
370	372		investigative demand under Section 15.10 for documents from any
371	373		person involved in a required divestiture to determine the
372	374		competitive effects of the divestiture.
373	375		SECTION 2. The attorney general shall issue guidance as
374	376		required by Section 18.106(e), Business & Commerce Code, as added
375	377		by this Act, not later than the 120th day after the effective date
376	378		of this Act.
377	379		SECTION 3. This Act takes effect September 1, 2025.