UK launches probe into Google Chrome plan over threat posed to third-party cookies

Fears Google's advertising data system changes could leave less room for rivals

(FILES) In this file photo taken on February 14, 2020 shows US multinational technology and Internet-related services company Google logo in Brussels. Google's plan to replace web browser cookies with a system that shares less data with advertisers is being investigated in the UK on January 8, 2021. / AFP / Kenzo TRIBOUILLARD

Britain's competition watchdog has launched an investigation into Google's plan to overhaul its advertising data system.

Authorities are concerned it could leave even less room for rivals in the online advertising industry.

The Competition and Markets Authority has opened a formal investigation into Google's proposals to remove so-called third-party cookies from its popular Chrome browser and Chromium browser engine.

It follows a move by the UK to introduce tougher regulations covering digital markets.

Cookies are small pieces of text kept on devices to keep track of user information such as the login name. They are 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 “privacy 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 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," the CMA’s Chief Executive Andrea Coscelli said.

"But there are also privacy concerns to consider, which is why we will continue to work with the Information Commissioner’s Office as we progress this investigation, while also engaging directly with Google and other market participants about our concerns."

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 Google controls more than 90 per cent of the UK’s £7.3 billion ($10 billion) search advertising market.

Google stressed that it has not made any changes yet and is collaborating with the industry to come up with the best solution.

The company said other browsers such as Safari and Firefox have already started blocking third-party cookies, but acknowledged 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, which is made up of technology and publishing companies.

“We believe that the CMA’s investigation will confirm this and save the web for future generations."

The CMA has advised the government on the need for a new regulatory regime for digital markets.

Last March it was asked by government to lead the Digital Markets Taskforce to advise the government on how a new pro-competition approach should be designed.

"To ensure the UK can continue to enjoy a thriving tech sector, consumers and businesses who rely on tech giants like Google and Facebook should be treated fairly, and competitors should face a level playing field – enabling them to deliver more of the innovative products and services we value so highly," Mr Coscelli said.

"For that to happen, the UK needs new powers and a new approach. In short, we need a modern regulatory regime that can enable innovation to thrive, while taking swift action to prevent problems."

The government is now due to consult on the proposals.