UK competition watchdog warns it will keep a ‘close eye’ on Google as it agrees legally-binding commitments over controversial ‘Privacy Sandbox’ system that could cost publishers up to 70% of their revenue
- Competition watchdog says Google has signed up to legally binding rules
- Regulators will have oversight to ensure Google’s Privacy Sandbox plan avoids squeezing competition when removing third-party cookies on Chrome browser
- The CMA will work with Google during development of new Sandbox proposals
The UK competition watchdog today announced it has secured a legally binding commitment from Google to address antitrust concerns over its controversial ‘Privacy Sandbox’ system.
It follows warnings that the tech giant’s plans to replace third party cookies in its Chrome browser would increase its dominance of the online advertising market and hit publishers’ revenues by up to 70%.
The new technology will replace cookies, in which advertisers track individuals across the websites they visit, with a system that splits users into cohorts.
Previously the Competition and Markets Authority had warned that the changes could enhance Google’s dominant position in online advertising, with third parties no longer able to track users and get an insight into their online browsing interests.
It also warned the changes could undermine the ability of online publishers to generate revenue and continue to produce valuable content in the future, reducing the public’s choice of news sources.
But now the CMA said the search engine has signed up to legally binding rules designed to ensure that publishers are not squeezed when the Sandbox technology is rolled out.
After accepting the proposed changes from Google, the regulator’s chief executive Andrea Coscelli said it would keep a ‘close eye’ on the Silicon Valley giant and ‘we are under no illusions that our work is done’.
The regulators said it want to ensure the changes protect consumers both from competition and privacy and will not be put into action until a series of testing phases.
Third-party cookies will not be removed until the CMA is satisfied that its competition concerns have been addressed.
The Competition and Markets Authority (CMA) said the search engine has now signed up to legally binding rules to avoid growing its market dominance even further in online advertising
The commitments, which run for six years, include the CMA and Information Commissioner’s Office (ICO) working with Google during the development and testing of the new Sandbox proposals.
It follows an antitrust investigation launched 13 months ago after outrcy at the plans from publishers and advertisers.
The ‘Movement for an Open Web’ (MOW) alliance of tech businesses, advertisers and publishers had said Google admitted that removing third-party cookies ‘without an adequate replacement’ would see most of the world’s top 500 publishers lose more than 50 per cent of their revenue, and some over 70 per cent.
It also said the ‘Privacy Sandbox’ would impair independent analytics, advertising, fraud detection, data services, performance optimisation and other open web features.
Google has already delayed the rollout of the plans until 2023 and aims to roll out the new proposals globally if successfully implemented in the UK.
It has committed to be more transparent than initial proposals laid out, including the publication of test results, with the CMA allowed to intervene as required.
Third-party cookies will not be removed until the CMA is satisfied that its competition concerns have been addressed.
The CMA added it had the right to reopen its investigation, first launched in January 2021, if required.
Google will restrict the sharing of data within its own organisation to ensure it does not get an advantage over competitors when third-party cookies are removed.
The company will also commit to not give itself preference in its advertising services, while a monitoring trustee will be appointed to work alongside the CMA.
Regulators said they want to ensure the changes protect consumers both from competition and privacy and will not be put into action until a series of testing phases
Andrea Coscelli, CMA chief executive, said: ‘While this is an important step, we are under no illusions that our work is done.
‘We now move into a new phase where we will keep a close eye on Google as it continues to develop these proposals.
‘We will engage with all market participants in this process, in order to ensure that Google is taking account of concerns and suggestions raised.’
The Competition and Markets Authority (CMA) regulator said in a statement: ‘The commitments we have obtained from Google will promote competition, help to protect the ability of online publishers to raise money through advertising and safeguard users’ privacy.’
Google separately said it would ‘apply the commitments globally’, adding ‘they provide a roadmap for how to address both privacy and competition concerns in this evolving sector’.
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