CMA States “Concerns Remain” After Google’s Cookie U-Turn

The British competition regulator has provided an update on Google’s online advertising practices, after its notable u-turn in the summer.

The UK’s Competition and Markets Authority (CMA) announced on Tuesday that “concerns remain” over Google’s plans to retain third-party cookies as part of its Chrome browser.

It comes after Google in July had cancelled its ‘Privacy Sandbox’ plan to phase-out of third-party Chrome cookies, because it would require “significant work by many participants and would impact publishers, advertisers and virtually anyone involved in online advertising.”

Concerns remain

Advertisers are of course Google’s largest source of revenue, and had made their feelings known that removing third-party cookies from Chrome would limit their ability to deliver personalise ads, leaving them dependent on Google’s own user databases.

In an attempt to appease critics of the move, Alphabet-owned Google had pledged that users would be given the choice to allow cookies to track them when browsing with Chrome.

But this is not sitting well with the British regulator.

“On 22 July 2024, Google announced that it is changing its approach to Privacy Sandbox,” the CMA noted. “Instead of removing third-party cookies from Chrome, it will allow users to choose whether to retain third party cookies.”

The CMA then invited comments and feedback on Google’s revised approach, and possible implications for consumers and market outcomes.

“Based on careful consideration of the responses we received, the CMA’s view is that competition concerns remain under Google’s revised approach,” the regulator stated. “The CMA wants to ensure that these changes are made in a way which supports continued competition in digital advertising.”

“The current commitments would need to be updated to reflect the evolution in Google’s planned Privacy Sandbox browser changes and the CMA is discussing with Google what changes would be required to address the CMA’s competition concerns,” it added. “If the CMA is not able to agree changes to the commitments with Google which address the competition concerns, then the CMA will consider what further action may be necessary.”

The CMA said it will publicly consult before taking any decision on whether to accept changes to the commitments, and is aiming to do this in Q4 2024.

The CMA also said it plans to provide an update at that time on its views relating to the Privacy Sandbox tools and its assessment of testing and trialling results. It will also continue to work with the ICO to consider privacy and user choice design concerns in relation to Google’s revised approach.

Google’s u-turn

Cookies of course are small pieces of code that websites implant in a visitor’s web browser, which then tracks what other websites the user visits.

Cookies are responsible for much of the revenue generation in the digital advertising ecosystem, and there is concern that after years of delaying, Google’s decision in July to halt the removal of third-party cookies is a notable privacy u-turn for the firm and its Chrome browser.

It should be noted that rival browsers such as Mozilla’s Firefox and Apple’s Safari have already blocked third-party cookies.

Google had unveiled its cookie proposals as far back as May 2019, in response to what it said was users wanting more privacy when they are browsing the web, including not being tracked across websites.

Collectively, Google’s changes were called the ‘Privacy Sandbox’ project, and are designed to disable third party cookies on the Chrome browser and Chromium browser engine.

The UK’s CMA watchdog had in January 2021 opened an investigation into Google’s proposals to remove third party cookies, and then in June 2021, Google agreed to the CMA’s oversight of the process, after complaints from unhappy advertisers.

The CMA thus took up the role in the design and development of Google’s Privacy Sandbox proposals to ensure they do not impede competition in digital advertising. And Google agreed to not implement its plan without the CMA’s sign-off, and would apply the approved plan around the world.

Years of delays

In November 2021 Google had made fresh concessions to restrict its use of data from its Chrome browser, in order to address CMA concerns about its efforts to ban third-party cookies.

In May 2023 Google said it would begin replacing third-party cookies for 1 percent of Chrome users in Q1 2024, with full switch off later.

Then in January 2024 Google gave tens of millions of its Chrome browser users the option of switching off third-party cookies, after it had activated the system for a random one percent of those who use Chrome, or about 30 million people.

But in April 2024 Google again delayed the phase-out of third-party Chrome cookies after pushback from the industry and the British regulator.

That was the third time that Google had delayed the removal of third-party cookies, and then in July 2024 Google stated it will no longer cancel third-party cookies in the Chrome browser.