Google has been forced to give UK authorities the final say on any new system to replace third-party cookies, with the competition regulator playing a major role in the design and development of the tech giant’s Privacy Sandbox proposals to ensure they do not distort competition.
The move follows an investigation in which the Competition & Markets Authority worked closely with the Information Commissioner’s Office to review the Privacy Sandbox. The CMA said it will continue this collaboration to assess the effectiveness of alternatives to third-party cookies being developed.
The CMA is now launching a consultation on whether to accept Google’s commitments. If accepted, the commitments would be legally binding.
The offer of commitments is a result of enforcement action that the CMA launched against Google in January 2021, when a number of businesses raised concerns about the company’s plans to phase out third-party cookies and other functionalities in its Chrome browser.
While there have been privacy concerns about their use, these cookies are used by digital advertisers to personalise and target advertisements more effectively, providing an income stream for free online content such as newspapers.
The CMA was concerned that, without regulatory oversight and scrutiny, Google’s alternatives could be developed and implemented in ways that impede competition in digital advertising markets.
The regulator argued that this would cause advertising spending to become even more concentrated on Google, harming consumers who ultimately pay for the cost of advertising. It would also undermine the ability of online publishers such as newspapers to generate revenue and continue to produce valuable content in the future.
The CMA will now consult on the commitments, which, it insists, will protect competition in digital advertising markets while safeguarding users’ privacy. They also include specific limits on how Google can use and combine customer data for digital advertising.
The commitments offered by Google to the CMA include:
– A commitment to develop and implement the proposals in a way that avoids distortions to competition and the imposition of unfair terms on Chrome users. This includes a commitment to involve the CMA and the ICO in the development of the proposals to ensure this objective is met.
– Increased transparency from Google on how and when the proposals will be taken forward and on what basis they will be assessed. This includes a commitment to publicly disclose the results of tests of the effectiveness of alternative technologies.
– Substantial limits on how Google will use and combine individual user data for the purposes of digital advertising after the removal of third-party cookies.
– A commitment that Google will not discriminate against its rivals in favour of its own advertising and ad-tech businesses when designing or operating the alternatives to third-party cookies.
– A standstill period of at least 60 days before Google proceeds with the removal of third party cookies, giving the CMA the opportunity, if any outstanding concerns cannot be resolved with Google, to reopen its investigation and, if necessary, impose any interim measures necessary to avoid harm to competition.
CMA chief executive Andrea Coscelli said: “The emergence of tech giants such as Google has presented competition authorities around the world with new challenges that require a new approach.
“That’s why the CMA is taking a leading role in setting out how we can work with the most powerful tech firms to shape their behaviour and protect competition to the benefit of consumers.
“If accepted, the commitments we have obtained from Google become legally binding, promoting competition in digital markets, helping to protect the ability of online publishers to raise money through advertising and safeguarding users’ privacy.”
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