CMA opens investigation into Google’s Privacy Sandbox browser changes

The Competition and Markets Authority has just announced it will investigate Google’s decision to remove third-party cookies from its Chrome browser in early 2022 and replace them with a set of proposals known as the Privacy Sandbox (NB: Google has justified this decision on privacy). The investigation – under Chapter II of the Competition Act 1998 (the equivalent of Article 102 TFEU) – follows complaints, including from the association Marketers for an Open Web Limited, a group of that approached the CMA last November with a request for interim measures. The Privacy Sandbox has been under the CMA’s radar for quite some time, and in its seminal Report on online platforms and digital advertising the regulator raised a number of concerns about its potential impact, including that it could undermine the ability of publishers to generate revenue and undermine competition in digital advertising, entrenching Google’s market power. According to the press release, the CMA will now assess “whether the proposals could cause advertising spend to become even more concentrated on Google’s ecosystem at the expense of its competitors.”

This is a very interesting development. It also confirms that the relationship between competition and privacy will be a hot topic throughout 2021. In fact, Damien, Theano and I recently finalized a paper examining in detail Google’s decision to deprecate third-party cookies in Chrome (see here for an overview of the paper) and the Privacy Sandbox, focusing on Google’s ability to act as a de facto privacy regulator, and using this as an opportunity to reflect on the possible tension between privacy and competition. The CMA is fully aware of what is at stake, and in the press release it makes it clear that it is keen to adopt a synthetic approach in close collaboration with the Information Commissioner’s Office (the Data Protection Authority in the UK) so that legitimate privacy concerns are addressed without distorting competition.

“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.”

Andrea Coscelli, Chief Executive of the CMA

It’s certainly good to see that competition authorities are not afraid to step in complex matters, even when companies raise privacy concerns to justify controversial conduct. The CMA has of course an open mind, and it has not reached a conclusion on whether Google’s conduct might infringe competition law. But this will be a unique opportunity for a regulator to influence Google’s proposals as they are developed (rather than coming after the party is over, as is often the case with antitrust investigations). Stay tuned for more developments!

(Image Source: Forbes)

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