Google assures UK competition authority it won’t hurt rivals with new proposals for Chrome ad systems
Google’s next generation of its controversial digital advertising systems is to be developed under the supervision of the UK competition regulator, it was revealed today.
The US tech giant signed a world-first agreement with the Competition and Markets Authority to protect user privacy and ensure real competition and fair returns for news publishers.
Google promised it will not discriminate against rivals in implementing its new way of targeting ads that the CMA fears could hurt the market.
The California-based company has promised that it will not favor its own ad and ad technology companies in designing and deploying a new system that will radically overhaul the way ads work in the Chrome browser.
Google plans to replace so-called third-party cookies with a new “Privacy Sandbox” sometime next year, and it’s already doing trials.
It would mean that instead of traditional third-party cookies, where advertisers can track individuals on the websites they visit, users are split into cohorts.
Google plans to replace so-called third party cookies with a new ‘Privacy Sandbox’ sometime next year. The company headquarters in Mountain View, California is pictured
Instead of sending a person’s browsing history to a central location, their own computer will find out what they like and assign it to a group of similar interests.
Online ads will still be personalized under the system, but Google claims it will provide users with more privacy.
But rivals and regulators worry the move could strengthen Google’s stranglehold on the online advertising market.
5 key commitments offered by Google
The Competition and Markets Authority said Google’s commitments include:
- A commitment to develop and implement the proposals in a way that avoids distortions of competition and the imposition of unfair terms on Chrome users. This includes a commitment to involve the CMA and the ICO in the development of the proposals to ensure that this objective is met.
- More transparency from Google about how and when proposals are picked up and on what basis they are judged. This includes a commitment to make the results of tests of the effectiveness of alternative technologies public.
- Significant restrictions on how Google will use and combine individual user data for digital advertising after deleting third-party cookies.
- A commitment that Google will not discriminate against its rivals in favor of its own advertising and ad-tech activities when designing or using the alternatives to third-party cookies.
- A suspension period of at least 60 days before Google removes third-party cookies, which will allow the CMA, if outstanding issues cannot be resolved with Google, to reopen the investigation and, if necessary, impose interim measures necessary to prevent harm to competition.
CMA chief executive Andrea Coscelli said: “The rise of tech giants like Google has presented competition authorities around the world with new challenges that require new approaches.
“That’s why the CMA is taking a leadership role in outlining how we can partner with the most powerful tech companies to shape their behavior and protect competition to the benefit of consumers.
“If accepted, the commitments we’ve obtained from Google will become legally binding, promoting competition in digital markets, protecting the ability of online publishers to raise money through advertising, and protecting user privacy.” .’
In its latest update on the issue today, the CMA broadly endorsed criticism from Marketers for an Open Web (MOW) — a group of online publishers, advertisers, technology and data companies — that the Privacy Sandbox was anti-competitive and self-preferential.
The regulator’s solution is to allow Google to proceed with the Privacy Sandbox, but only under its supervision.
This will effectively be a trial for the CMA’s new Digital Markets Unit when it is given legal powers to enforce a new code of conduct.
In January, the CMA, which is based in London’s Canary Wharf, said it was working with the Information Commissioner’s Office to investigate the removal of third-party cookies.
And a CMA spokesperson said today: “While there have been privacy concerns about their use, these cookies are used by digital advertisers to more effectively personalize and target ads, providing a revenue stream for free online content such as newspapers.”
“The CMA was concerned that without regulatory oversight and scrutiny, Google’s alternatives could be developed and implemented in a way that would hinder competition in the digital advertising markets.
“This would concentrate ad spend even more on Google, hurting consumers who end up paying for the cost of ads. It would also undermine the ability of online publishers such as newspapers to generate revenue and continue to produce valuable content in the future.”
Google is now committed to developing and implementing the new changes in a way that does not distort competition or impose unfair terms on Chrome users.
The Competition and Markets Authority is located in this building in London’s Canary Wharf
The company has also pledged greater transparency about how and when it will implement and assess its new proposals.
It said that under its proposals there would be no data advantage for Google ad products and that its ad products or its own sites would not receive preferential treatment.
Andrea Coscelli, the chief of the competition and market authority, said tech giants have presented competition authorities with new challenges that require new approaches.
A Google spokesperson said in a blog post: “Today we are offering a series of commitments – the result of many hours of discussions with the CMA and more generally with the wider web community – about how we will design and implement the Privacy Sandbox proposals and process user data in Google’s systems in the coming years.
“The CMA is now asking others in the industry for feedback on these commitments as part of a public consultation to make them legally binding. If the CMA accepts these commitments, we will apply them globally.”
But Tim Cowen, chairman of the antitrust practice at London law firm Preiskel & Co and a critic of Google, said there were problems with the company’s track record in making commitments, taking as an example the recent submission to French authorities. commitments made.
He added: “If the CMA is offered any commitments, they need to take a close look at them — make sure they’re practical — and change Google’s behavior.”
The CMA’s consultations with interested third parties will close at 5 p.m. on 8 July 2021. A final decision is then made on whether or not to accept the offered commitments.
The new system will be a major overhaul of the way ads work in Google’s Chrome browser
A MOW spokesperson said today that the CMA had listened and responded to its concerns that Google was stifling competition in digital advertising.
MOW’s director James Rosewell said: “This appears to provide a mechanism to create the conditions for actually safeguarding people’s privacy and freedom of choice.”
The group said it welcomed the CMA’s decision to monitor Google’s proposals to ensure they don’t hurt competition, as well as a 60-day “standstill” period for advertisers to voice their objections before third-party cookies. are being changed.
Mr Rosewell added: “The authority must ensure that Google is not allowed to use undue influence and bully competitors, as it has done in the past. We will look to Google to deliver on its promises to the CMA.
Likewise, we will be looking at the CMA and when it launches, the regulator’s new Digital Markets Unit, to ensure a level playing field is created and maintained, preserving the open web for generations to come.”