In what would otherwise be a very significant case, the CMA, UK’s Competition and Markets Authority (CMA) has put Google’s plan to phase out third-party cookies on hold, citing real competition concerns. This choice highlights the concentration of attention the tech giants’ operations are subject to regarding their impact on competition and privacy.
A Privacy Sandbox project has been launched by Google which purports to improve user privacy on the internet by removing the third-party cookies. CMA also cautioned that the project might boost the company’s dominance in the online advertising business if dealt with carelessly.
The intervention by CMA follows a clearly outlined assessment featured in their current report. The evaluation assesses such impacts calling back on the pledges made by Google in February 2022. Those commitments were made to tackle the competition issues which the removal of cookie resulted from, Google’s famous internet browser, Chrome.
Key findings and what is expected in future steps:
- Standstill on Cookie Deprecation: Google is now committed to canceling third-party cookies, but only after CMA’s questions are answered. When these issues are dealt with and solved, Google will have the right to implement its plan, which could be as early as the second half of 2024.
- Testing Phase Insights: At present, CMA is in the examining stage of data to accumulate further evidence on Privacy Sandbox tool’s likely effects. Such a stage is paramount for reviewing the overall impact of these instruments on competition, and it shall shape the CMA’s position as the test period ends.
- Compliance and Cooperation: Commencing from October through December 2023, Google has been found to be in compliance with the commitments by engaging collaboratively with the CMA with a view to addressing the specified issues. Though, the authority states that Google must put in place additional measures to comprehensively remedy competition concerns.
- Ongoing Engagement: The CMA aims to timely cooperate with Google in Q1 2024 to eliminate competition problems that were identified. This would mean that the Privacy Sandbox do own advertising services not give a preference to Google, and also to clarify long-term governance arrangements for the Sandbox.
- Open for Feedback: The CMA welcomes the comments from interested people till 27th February 2024. This feedback will act as a main basis for the discussions with Google and will help set up future development of digital advertising in a way that makes the market competitive.
Implications and Next Steps
CMA’s report brings to fore the delicate balance between the two important issues of boosting user privacy and creating a level playing field for the digital advertising industry. While Google is trying to sort out the CMA’s claims, it highly likely that the result of this evaluation will set a benchmark for how such privacy-centric initiatives are assessed globally from the competition perspective.
A wide range of stakeholders in the digital advertising environment are following the scenario closely as the decisions will be made in the next few months may tilt the rules and redefine the engagement in the online advertising, and any change could affect millions of business and consumers across globe.
These changes will undoubtedly continue while we wait for the next developments. Media, regulatory bodies, and advertisers have to collaborate so that the technological progress achieved does not result in loss of positive environment for business.
