The Competition and Markets Authority (CMA) has opened an investigation into Google's proposed Privacy Sandbox after receiving complaints that the move could enable Google to abuse its dominant market position, stifle competition, and undermine the ability of publishers to generate revenue.
In August 2018, Google announced its intent to start a new initiative, dubbed Privacy Sandbox, to eliminate the use of third-party cookies and replace them with new technologies that will preserve the privacy of billions of Internet users worldwide.
Google said that it plans to phase out third-party cookies in Chrome by early 2022 and is working with many publishers, developers, and advertisers to develop alternative tools and mechanisms that will be more privacy-centric while not hurting the revenues of publishers and advertisers.
"Users are demanding greater privacy--including transparency, choice, and control over how their data is used--and it’s clear the web ecosystem needs to evolve to meet these increasing demands," Google said.
"We are working actively across the ecosystem so that browsers, publishers, developers, and advertisers have the opportunity to experiment with these new mechanisms, test whether they work well in various situations, and develop supporting implementations, including ad selection and measurement, denial of service (DoS) prevention, anti-spam/fraud, and federated authentication. "
Earlier today, the UK's Competition and Markets Authority (CMA) said it, along with the Information Commissioner's Office, has opened an investigation into Google's Privacy Sandbox after receiving several complaints, including from Marketers for an Open Web Limited, a group of newspaper publishers and technology companies, that the initiative may enable Google to abuse its dominant position.
"As the CMA found in its recent market study, 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, which is why we will continue to work with the ICO as we progress this investigation, while also engaging directly with Google and other market participants about our concerns," said Andrea Coscelli, Chief Executive of the CMA.
The CMA has already observed during its recent market study into online platforms digital advertising that the Privacy Sandbox could undermine the ability of publishers to generate revenue and undermine competition in digital advertising, entrenching Google’s market power. Therefore, it believes the investigation "will provide a framework for the continuation of this work, and, potentially, a legal basis for any solution that emerges."
"The CMA has an open mind and has not reached any conclusions at this stage as to whether or not competition law has been infringed. The CMA will continue to engage with Google and other market participants to ensure that both privacy and competition concerns can be addressed as the proposals are developed," it added.