Well, this is big. The U.K.’s competition regulator looks set to get an emergency brake that will allow it to stop Google from ending support for third-party cookies, a technology that’s currently used for targeting online ads, if it believes competition would be harmed by the depreciation going ahead.
The development follows an investigation by the Competition and Markets Authority (CMA) into Google’s self-styled “Privacy Sandbox” earlier this year.
The regulator will have the power to order a standstill of at least 60 days on any move by Google to remove support for cookies from Chrome if it accepts a set of legally binding commitments the latter has offered — and which the regulator has today issued a notification of intention to buy.
The CMA could also reopen a fuller investigation if it’s unhappy with how things look when it orders any standstill to stop Google from crushing tracking cookies.
It follows that the watchdog could also block Google’s more comprehensive “Privacy Sandbox” technology transition entirely — if it decides the shift cannot be done in a way that doesn’t harm competition. However, the CMA said today it takes the “provisional” view that Google’s set of commitments will address competition concerns related to its proposals.
It’s now opened a consultation to see if the industry agrees — with the feedback line open until July 8. Commenting in a statement, Andrea Coscelli, the CMA’s chief executive, said:
The emergence of tech giants such as Google has presented competition authorities worldwide with new challenges that require a new approach.
That’s why the CMA is leading in setting out how we can work with the most influential tech firms to shape their behavior and protect competition to benefit consumers.
If accepted, the commitments we have obtained from Google become legally binding, promoting competition in digital markets, helping to protect the ability of online publishers to raise money through advertising, and safeguarding users’ privacy.
In a blog post sketching what it’s pledged — under three broad headlines of “Consultation and collaboration,”; “No data advertising advantage for Google products,”; and “No self-preferencing” — Google writes that if the CMA accepts its commitments, it will “apply them globally”, making the U.K.’s intervention potentially hugely significant.
It’s perhaps one slightly unexpected twist of Brexit that puts the U.K. in a position to make critical decisions about the rules for global digital advertising. (The European Union is also working on new regulations for platform giants’ operations, but the CMA’s intervention on Privacy Sandbox does not yet have a direct equivalent in Brussels.)
That Google is choosing to offer to turn a U.K. competition intervention into a global commitment is itself very interesting. It may be partly an added sweetener — nudging the CMA to accept the offer so it can feel like a global standard-setter.
At the same time, businesses do love operational certainty. So if Google can hash out a set of rules accepted by one (relatively) primary market because they’ve been co-designed with national oversight bodies and then scale those rules everywhere, it may create a shortcut path to avoiding any more regulator-enforced bumps in the future.
So Google may see this as a smoother path toward the sought-for transition for its adtech business to a post-cookie future. Of course, it also wants to avoid being ordered to stop entirely (or, well, maybe not! Either outcome would indeed work for Google).
More broadly, engaging with the fast-paced U.K. regulator could be a strategy for Google to try to surf over the political deadlocks and risks which can characterize discussions on digital regulation in other markets (especially its home turf of the U.S. — where there has been a growing drumbeat of calls to break up tech giants; and where Google specifically now faces several antitrust investigations).
The outcome it may be hoping for is being able to point to regulator-stamped “compliance” — so that it can claim it as evidence there’s no need for its ad empire to be broken up. (Or to have a regulator order that it can’t make privacy-centric changes.)
Google’s offering of commitments also signifies that regulators who move fastest to tackle the power of tech giants will be the ones helping to define and set the standards and conditions that apply to web users everywhere. At least — unless or until — more radical interventions rain down on big tech.
What is Privacy Sandbox?
Privacy Sandbox is a complex stack of interlocking technology proposals for replacing current ad tracking methods (which are widely seen as horrible for user privacy) with alternative infrastructure that Google claims will be better for individual privacy and also still allow the adtech and publishing industries to generate (it claims much the same) revenue by targeting ads at cohorts of web users — who will be put into “interest buckets” based on what they look at online.
The full details of the proposals (which include components like FLoCs, aka Google’s proposed new ad ID based on federated learning of cohorts, and Fledge/Turtledove, Google’s suggested new ad delivery technology) have not yet been set in stone.
