Tension Between Privacy and Competition Exposed in Google’s Latest Regulatory Probe

Last week the U.K.’s Competition and Markets Authority opened a formal investigation into Google’s Privacy Sandbox, a series of ongoing proposals for post-cookie online advertising in Google Chrome while providing more data security for consumers.

The CMA will assess whether or not the implementation of Privacy Sandbox—which currently proposes that most of the mechanics of online advertising take place within the Chrome browser—would cause ad spend to become even more concentrated within Google’s ecosystem.

Just a few years ago, the conventional wisdom was that competition had nothing to do with privacy.

Amazing how the dialogue has shifted to how competition for our largest market cap companies has everything to do with privacy.

UK to probe Google Chrome. https://t.co/8ZgQUPHI5v

— Dina Srinivasan (@DinaSrinivasan) January 8, 2021

The auspice of privacy

Privacy Sandbox is Google’s attempt to answer the growing calls for better protection of user data, as indicated by laws such as CCPA and GDPR. According to its detractors, however, Sandbox actually buttresses Google’s market dominance using the auspice of user privacy to justify anticompetitive behavior.

“Google’s Privacy Sandbox proposals will potentially have a very significant impact on publishers like newspapers and the digital advertising market,” said Andrea Coscelli, CEO of the CMA, in a statement. “But there are also privacy concerns to consider.”

Anti-Privacy Sandbox advocates Marketers for an Open Web filed complaints with the CMA late last year, with the U.K. trade body telling Adweek its concerns also include Google’s proposed single sign-on process, a measure that could see publishers cede control of reader registration on their sites.

Wayne Blodwell, CEO of advertiser consultancy The Programmatic Advisory, told Adweek the phasing out of third-party cookies from any web browser—just as Apple’s Safari and Mozilla’s Firefox have done in recent years—favors Google’s ad operations.

“They have a large first-party relationship with consumers and own major advertising platforms, so put simply, their ads business will be less impacted whereas their competition could be decimated,” Blodwell said.

The CMA’s investigations are ongoing, and Google has yet to respond publicly to the developments.

News of the CMA probe into how Google’s proposed Privacy Sandbox operates could potentially favor its own ad stack came just weeks after Texas’ attorney general led an antitrust lawsuit against Google, citing concerns that its ad stack unfairly favors its own operations over potential competitors.

Privacy and commercial interests

Since its inception, Google has attempted to validate Privacy Sandbox through participation in the World Wide Web Consortium (W3C), a global tech standards body that counts Tim Berners-Lee, inventor of the internet, among its senior leadership.

Here, assorted parties such as academics, software engineers plus representatives of ad-funded commercial interests, including Google and (to a lesser extent) its smaller rivals, debate the merits of such proposals.

Several sources told Adweek the privacy lobby within W3C has grown increasingly wary of commercial interests among its membership. Indeed, some suggest this alleged bias as the root cause behind a Google candidate—among others representing advertising interests—failing to win election to the body’s influential Technical Architecture Group last week.

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