Google has been given the nod by the UK’s competition watchdog over its proposed reforms for online advertising, including banning third-party cookies within its web browser Chrome.
The technology giant – which alongside Facebook holds an enormous share of the global advertising market – says the reforms will improve how the industry handles individuals’ data.
But onlookers including the Competition and Markets Authority are concerned that Google‘s plans would “cause online advertising spending to become even more concentrated on Google”.
Victory for British regulation
In a victory for British regulators, on Friday the CMA said it was happy to let Google continue exploring its Privacy Sandbox plans having received commitments from Google which the company would roll-out on a global basis.
Crucially the CMA has blocked Google from removing third-party cookies until the regulator is satisfied that this won’t post a competition risk.
Google says that the planned updates to its Chrome web browser (used by more than 69% of all web users) will remove “commonly used tracking mechanisms, like third-party cookies” as well as block covert techniques that websites use to identify their users.
Cookies are small files that get stored within web browsers when they visit a site and are for instance the software used to keep people logged in to a website.
Third-party cookies are cookies that don’t originate from the site the web browser is currently visiting, instead being linked to a third-party, often an advertising service.
Many companies complained that Google removing third-party cookies would negatively impact their ability to tailor and personalise advertisements based on information they could collect on users, thus making them even more dependent on Google’s own user databases.
The CMA was also concerned that the proposals “could undermine the ability of online publishers such as newspapers to generate revenue and continue to produce valuable content in the future, reducing the public’s choice of news sources”.
The online news industry is losing a growing share of the advertising market to the “de-facto duopoly” of Google and Facebook, with more than 60% of all UK media advertising going to those companies in 2019.
Andrea Coscelli, the CMA’s chief executive, said: “Our intervention in this case demonstrates our commitment to protecting competition in digital markets and our global role in shaping the behaviour of world-leading tech firms.
“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.
“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,” he added.