In January 2021, the Competition and Markets Authority (CMA) opened an investigation after it had competition law concerns relating to Google’s proposals to remove third party cookies on Google Chrome, replace the cookies’ functionality with a range of ‘Privacy Sandbox’ tools and transfer key functionality to Chrome. Third party cookies are fundamental to digital advertising as they help businesses target audiences more effectively. The concerns focussed on the potential for the proposals to undermine competition in digital advertising, reinforce Google’s market power and limit the ability of publishers to generate revenue.
On 11 February 2022, the CMA published its decision to accept binding commitments from Google in relation to its proposals to remove third party cookies. These include the CMA and Information Commissioner’s Office supervising the development and testing of the Privacy Sandbox proposals to ensure they benefit customers, protect privacy, and do not distort competition.
As part of this, Google committed to:
- Substantial limits on how it will use data for the purposes of digital advertising
- Not discriminate against its rivals in favour of its own advertising or ad-tech businesses when designing or operating alternatives to third party cookies, and
- Anti-circumvention of the non-discrimination provisions
On 23 March 2022, the CMA approved the appointment of ING Bank N.V. by Google as a monitoring trustee to monitor compliance with its binding commitments listed above.
On 5 October 2022, the CMA announced it had approved the appointment of S-RM Intelligence and Risk Consulting Limited by the monitoring trustee as an independent technical expert to support ING in its monitoring of the above commitments. The technical expert will provide specialised knowledge to support ING, particularly in relation to monitoring data flows and understanding the potential impacts of the Privacy Sandbox proposals on ad-tech markets.
The Privacy Sandbox proposals are still under development (their evolution can be tracked via Google’s blog). The CMA also publishes quarterly progress reports on the implementation of the commitments on its cases page.
Formal acceptance of Google’s commitments brought the CMA’s investigation to an end, with no decision being made on whether or not the Competition Act 1998 has been infringed by the Privacy Sandbox proposals. However, it is still open to the CMA to act if it has competition law concerns outside the scope of the binding commitments, or if the commitments are not adhered to.
If you work in the digital advertising sphere, you should be reassured by Google’s commitment to not remove third party cookies from the Chrome browser until the CMA is satisfied that its competition law concerns have been addressed. All these measures have been designed to ensure that the replacement of third party cookies does not lead to market dominance by Google, or otherwise distort competition, but ultimately third party cookies will be removed and there will be a new ‘Privacy Sandbox’ landscape in Chrome.
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