New cookie policies proposed by Google have prompted an investigation by the Competition and Markets Authority (CMA), the watchdog revealed.
The investigation will explore whether the proposals could result in a greater monopoly of the online advertising space for Google.
The CMA said it has received complaints from Marketers for an Open Web, a group of newspaper publishers and technology companies. The group alleges the proposals will give Google a green light to abuse its dominant market position.
Tim Cowen, Chair of the Antitrust Practice at law firm Preiskel & Co LLP, said the investigation marks a significant moment for the regulator and online businesses.
“This is the first time that the UK has launched an antitrust investigation of this kind into the tech giants and the first time globally that a regulator has considered a forward-looking process to protect tech market competition,” he said.
A ‘Google-owned walled garden’
Announced last year, Google’s Privacy Sandbox project would see third-party cookies disabled on the Chrome browser and its affiliated Chromium browser engine.
Google hopes to replace them with a series of new tools focused on improving targeted advertising for users. The tech giant claims that the new functions will protect user privacy to a far greater extent than before.
While the project is currently in motion, Google said the proposals are yet to be fully authorised or implemented.
A recent study conducted by the CMA raised serious concerns about the impact of the new privacy features. In particular, the watchdog believes that they could significantly undermine the ability of alternative publishers to generate revenue and further entrench Google’s dominance in the online advertising space.
CMA Chief Executive, Andrea Coscelli, said the report highlighted issues for smaller businesses operating with the advertising space.
“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.”
Third-party cookies are a key component in online and digital advertising. Cookies enable business to target advertisements to web users more efficiently and catered to their needs.
Although cookies are an ever-present reality of online life, concerns have been raised in recent years over the legality of their use – especially in regard to privacy rights. It has been claimed that tracking consumer behaviour across the web infringes on a user’s right to privacy.
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The CMA said it has been working closely with the Information Commissioner’s Office to address ‘legitimate privacy concerns without distorting competition’.
As part of this, the CMA has been engaging with Google to better understand its proposals. The current investigation will provide a framework for the continuation of this work, and, potentially, a legal basis for any solution that emerges.
James Rosewell, Director of Marketers for an Open Web, said the investigation is critical for the future of online businesses, particularly publishers, advertisers and tech companies.
“By launching this investigation, the CMA has recognised the seriousness of this issue,” he said.
“Privacy Sandbox would effectively create a Google-owned walled garden that would close down the competitive, vibrant Open Web.”
Rosewell insisted that providing more identifiable, personal information to the tech giant “does not protect anyone’s privacy”.