Key Points
- Google’s decision to retain third-party cookies in Chrome has raised competition concerns from the UK’s CMA.
- The tech giant had originally planned to eliminate cookies but reversed course in response to advertiser backlash.
- Google now offers users the option to allow cookies, but regulators fear this could strengthen Google’s dominance in digital advertising.
- The CMA is considering further action if Google’s revised policy does not adequately address competition issues.
Google (GOOGL.O) is again facing scrutiny over its online advertising practices in the United Kingdom after the Competition and Markets Authority (CMA) expressed concerns about the company’s decision to retain third-party cookies in its Chrome browser. Despite prior plans to phase out these cookies, which track users across websites for ad targeting, Google reversed its decision in July 2023, citing pressure from advertisers who rely on cookies for personalized ads.
Third-party cookies have been a critical tool for advertisers, but critics argue they pose privacy risks by tracking user behavior across multiple websites. Google had initially planned to eliminate cookies, proposing new privacy-focused ad technologies to replace them. However, advertisers, Google’s largest revenue source, argued that this move would restrict their ability to tailor ads and leave them overly reliant on Google’s vast user data.
In response to the backlash, Alphabet-owned Google announced that Chrome users would now have the option to allow or reject cookies, attempting to strike a balance between user privacy and advertiser demands. This decision has prompted renewed scrutiny from regulators, including the CMA, who are concerned about the impact on competition.
The CMA had previously invited stakeholders to share their views on Google’s revised cookie policy. On Tuesday, the regulator said that after reviewing the feedback, it still harbors significant competition concerns. The watchdog fears that Google’s new approach could reinforce its dominance in the digital advertising space by limiting advertisers’ ability to gather data independently.
“If the CMA is not able to agree on changes to the commitments with Google, which address the competition concerns, then the CMA will consider what further action may be necessary,” the agency warned. It could lead to legal action or further regulatory measures against the tech giant.
In addition to the CMA, other regulators have voiced concerns about Google’s use of cookies. The Information Commissioner’s Office (ICO), Britain’s privacy regulator, had previously backed Google’s plan to ditch third-party cookies in favor of more privacy-conscious alternatives. However, with the new policy, the ICO is also expected to revisit the issue.
A Google spokesperson emphasized the company’s commitment to transparency and user choice, stating, “As we finalize this approach, we’ll continue to consult with the CMA, ICO, and other regulators globally, and look forward to ongoing collaboration with the ecosystem to build for a private, ad-supported internet.”
