LONDON — Britain’s competition watchdog said today it launched an investigation into Google’s plan to overhaul its ad data system over worries it could leave even less room for rivals in the online ad industry.
The Competition and Markets Authority said it opened a formal investigation into Google’s proposals to remove so-called third-party cookies from its popular Chrome browser and Chromium browser engine.
Cookies are small pieces of text kept on devices to keep track of user information such as the login name. They’re used to help businesses more effectively target advertising and fund free online content such as newspapers, but they can also be used to track users across the internet.
Google has proposed replacing third-party cookies with its own tools, as part of a “digital sandbox” set to be rolled out in 2022. But the watchdog said the changes could hurt publishers’ ability to make money as well as undermine digital ad competition, entrenching Google’s market power.
“Google’s Privacy Sandbox proposals will potentially have a very significant impact on publishers like newspapers, and the digital advertising market. But there are also privacy concerns to consider,” the CMA’s Chief Executive Andrea Coscelli said in a statement. Regulators will work with the U.K.’s privacy commissioner and engage with Google during the investigation, he said.
Chrome is the world’s dominant web browser, and many others like Microsoft’s Edge are based on Google’s Chromium technology. In a market study last year, the CMA found that Google controls more than 90% of the U.K.’s 7.3 billion-pound ($10 billion) search advertising market.
Google stressed that it hasn’t made any changes yet and it’s collaborating with the industry to come up with the best solution. The company pointed out that other browsers such as Safari and Firefox have already started blocking third-party cookies but also acknowledged that such moves hurt the ability of content creators, newsrooms, web developers and videographers to make money.
“Creating a more private web, while also enabling the publishers and advertisers who support the free and open internet, requires the industry to make major changes to the way digital advertising works,” the company said.
The CMA opened its investigation after receiving a complaint from an industry lobbying group, Marketers for an Open Web, which has said the changes would create a “walled garden” owned by Google and deny publishers access to cookies they use to sell digital ads, crimping their revenues by up to two-thirds.
“Providing more directly identifiable, personal information to Google does not protect anyone’s privacy,” said the group, made up of technology and publishing companies. “We believe that the CMA’s investigation will confirm this and save the web for future generations.”