UK CMA plans to investigate Google Chrome’s “privacy sandbox” for potential anti-competitive behavior

The “Privacy Sandbox” initiative proposed by Google could bring major changes to the online advertising industry, disabling third-party cookies entirely in the Chrome browser and introducing a new system to track the personal demographic information necessary to deliver targeted ads. However, this plan is not without legal pitfalls since it essentially proposes to change an entire industry in favor of a proprietary system that will be run by Google.

Although Google has yet to reveal all the details of this planned new system, the UK’s Competition and Markets Authority (CMA) has announced that it will investigate the proposal for its potential to stifle competition in the online advertising market.

Chrome to cut cookies by 2022

Although the Privacy Sandbox initiative would only initially affect Chrome’s web browsers, it would nevertheless send shockwaves to the entire digital advertising industry, given that Chrome has roughly 70% of the world’s internet browser market share. by the end of 2020.

While Google has been final about removing third-party cookies, it has yet to fully commit to a replacement system. There are alternative techniques, such as browser fingerprinting, but the company is currently testing a “trust token” system that would be based on a cryptographic signature. The company expects the system to be viable in about a year.

While third-party cookies tend to be unpopular with end users due to their own privacy concerns, the system does not belong to any company. Google’s new trust tokens would presumably require advertisers to purchase their services in some way to reach the huge market share of Chrome users.

CMA’s research is considering not only the potential impact of the Privacy Sandbox on publishers, but whether it is really in the interest of end-user privacy. If the agency ultimately determines that competition law has been violated, it will issue a statement of objections containing an interim decision to which Google would be required to respond. Any final decision to take legal action or impose fines would be determined by a case decision group. The CMA allows fines of up to 10% of a subject’s annual worldwide group turnover, a significantly steeper penalty than the maximum fine under the EU General Data Protection Regulation (GDPR).

Google issued the following statement on the investigation: “Creating a more private web, while allowing publishers and advertisers to support the free and open Internet, requires the industry to make major changes to the way advertising works. digital … We appreciate the participation of the CMA as we work to develop new proposals to support a healthy web, with advertising and without third-party cookies. “

Would the privacy sandbox favor Google’s advertising ecosystem?

In November, a coalition of ad agencies calling themselves Marketers for an Open Web (MOW) petitioned CMA to block Google’s plans to implement the Chrome Privacy Sandbox. The general marketing industry also plans to replace cookies at some point in the future, but currently favors a standard called UnifiedOpen ID 2.0 (UID2) intended to address consumer control issues over personal information that is shared. This proposal is still in its early stages, but early drafts of the documents revealed that the idea of ​​linking the user’s identity to an email address or phone number is being considered. While an industry standard of this nature would solve the problem that Google has an unfair competitive advantage, it is highly unlikely that users will adopt it from a privacy point of view.

The default blocking of third-party tracking cookies is already quite common in web browsers; Both Firefox and Safari have done this since 2019, and Chrome also lets you enable blocking. However, no other entity has come up with viable systems to keep the digital advertising industry afloat. While most people don’t mind the collection of personal information that the system entails, personalized advertising is particularly popular with small businesses due to the ability to quickly reach interested demographics in an affordable way. So the industry is unlikely to just turn around and die due to cookie blocking.

The objections do not necessarily focus on the idea of ​​using anonymous demographics to serve relevant ads; Studies show that consumers tend to overwhelmingly prefer to be shown ads that are relevant to them, but they also have serious concerns about industry ethics and what is being done with their data. Most of those concerns can be traced back to major industry players like Google and Facebook, and to the incredible scope of the data they collect about users of their services (making the nickname the “privacy sandbox” a less somewhat ironic).

Google’s new #privacy sandbox would presumably require #announcers to purchase their services in some way to reach the huge market share of Chrome users. #respectdata

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Regulations like the GDPR have eliminated personalized advertising in recent years along with the decreasing use of third-party cookies, but it remains an important component of digital marketing (particularly in the world of mobile applications). While advertisers may switch to contextual or semantic advertising if personalization is no longer viable, Big Tech has such a large investment in personalized ads (more than $ 134 billion in annual revenue for Google) that efforts like the Chrome Privacy Sandbox are unavoidable. regulators will have to deal with the future.


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