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The UK’s competition regulator has launched another probe into Google’s dominance of the online advertising market—this time concentrating on the way its proposals to introduce new privacy measures could shut out competitors on the open web.
The Competition and Markets Authority is investigating changes proposed in Google’s Privacy Sandbox, which include the removal of third-party cookies from its popular Chrome browser.
Cookies are small data files that retain information about internet users and help advertisers target online ads. Commonly, publishers will ask users for consent when they enter an ad-funded website, but privacy campaigners have complained that certain consent techniques fall foul of the GDPR, the European privacy law.
Google announced in 2019 that third-party cookies would be disabled on the Chrome browser within two years and created Sandbox as a way of enabling people and businesses to submit proposals for how to execute open-web advertising without cookies.
However, the CMA has received complaints, including from Marketers for an Open Web (MOW)—a group of newspaper publishers and tech companies—which argue Google is abusing its dominant position in online advertising through the Sandbox initiative.
James Rosewell, director of MOW, told Campaign that Google was effectively acting like Goldfinger, the eponymous villain from the James Bond movie, by creating a “Google-owned walled garden”.
“Goldfinger didn’t want to steal the gold, he wanted to poison it with radiation so no-one else could use it,” Rosewell said. “What Google is doing in the name of privacy is saying, ‘we will take these things away from the open web’, but they’re not taking it away from themselves.”
“They have a wide range of terms and conditions that people can accept through their various products. No competitor to Google could possibly gain that level of consent—unless their name starts with an F or an A and they’re also a multibillion-dollar tech company.”
Rosewell pointed out that the third-party cookie replacement proposals are only one of 23 different areas, such as fraud prevention, in which the Sandbox could have important implications for businesses that operate on the open web.
Mozilla’s Firefox and Apple’s Safari have already blocked third-party cookies on their browsers and this year Apple is planning to block ad tracking from being the default option on apps for iPhones and iPads.
Google, meanwhile, insists the Sandbox is an open initiative and it will consider changes put forward from the online advertising industry before making any changes in 2022. The company pointed to active discussions it has had with the CMA and the Information Commissioner’s Office as it tries to introduce more privacy controls to its ad business.
One of its proposals, Dovekey, builds on feedback from ad tech company Critero via the World Wide Web Consortium, the international standards organisation founded by world wide web founder Tim Berners Lee.
Dovekey suggests using a type of database system, called a key value server, to make it easier for adtech companies to preserve user privacy during ad targeting.
A Google spokeswoman said: “Creating a more private web, while also enabling the publishers and advertisers who support the free and open internet, requires the industry to make major changes to the way digital advertising works.
“The Privacy Sandbox has been an open initiative since the beginning and we welcome the CMA’s involvement as we work to develop new proposals to underpin a healthy, ad-supported web without third-party cookies.”
Last July the CMA launched a thorough and wide-ranging report into Google and Facebook’s dominance of the UK ad market and proposed creating a Digital Markets Unit that can impose fines in order to ensure the two companies do not engage in exploitative or exclusionary practices.
The UK government confirmed in November that it would create the Digital Markets Unit as part of the CMA’s remit.
Google enjoys a more than 90% share of the £7.3 billion search advertising market in the UK, the CMA noted last July, while Facebook has a share of more than 50% of the £5.5 billion display advertising market.
Andrea Coscelli, chief executive of the CMA, added today: “As the CMA found in its recent market study, Google’s Privacy Sandbox proposals will potentially have a very significant impact on publishers, like newspapers, and the digital advertising market. But there are also privacy concerns to consider, which is why we will continue to work with the ICO as we progress this investigation, while also engaging directly with Google and other market participants about our concerns.”
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