U.K. antitrust probe targets Google Chrome privacy changes

Google has a habit of inviting regulatory scrutiny on both privacy and antitrust fronts, so why not both at once?

On Friday, the U.K.’s competition watchdog opened a formal investigation into Google over supposedly pro-privacy changes the company is making to its market-leading Chrome browser. The government group said it will review whether the proposed tweaks violate antitrust law.

Like Apple, Google is responding to users’ privacy concerns by making it harder for companies to track them online. Specifically, Google’s new Privacy Sandbox project will gradually disable third-party tracking cookies in Chrome and its Chromium browser engine—also the foundation for rival browsers, such as Microsoft’s Edge—while giving advertisers other ways to target users with personalized advertising.

The U.K.’s Competition and Markets Authority (CMA) was already looking into the changes, alongside Google and the British data-protection regulator, the Information Commissioner’s Office (ICO), before announcing the formal investigation. “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,” said CMA chief executive Andrea Coscelli in a statement.

“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,” Coscelli said.

The investigation adds to a pile-on of recent tech backlash–related antitrust activity. Google has already been fined around $9 billion by EU antitrust authorities over a range of violations relating to search, advertising, and Android. Italy’s competition regulators are investigating its alleged abuses in display advertising. In the U.S., online publishers are suing Google for allegedly stifling advertising competition, and the Justice Department and state attorneys general are suing it (in multiple cases) over allegedly abusive contracts. The Federal Trade Commission and states are also suing to break up Facebook over “a years-long course of anticompetitive conduct.”

A Google-owned walled garden

The formal investigation’s opening follows a group of news publishers and tech firms filing a complaint in November that called on the CMA to delay the introduction of Chrome’s Privacy Sandbox changes.

The industry coalition said Google’s move would be an abuse of the tech giant’s dominant position in digital advertising, making it harder for marketers to measure their ads’ performance. The result would be a lower return on their ad investments and, therefore, less money for the publishers, the group said.

Any business buying or selling advertising would become reliant on Google, strengthening Google’s “monopoly control of online commerce,” said the group, called Marketers for an Open Web.

The companies that make up the complainants remain mostly anonymous, citing fear of retaliation from Google. But the group’s director, James Rosewell, also the CEO and cofounder of 51degrees, a mobile web performance-boosting firm based in London, told Fortune they include major publishers among their numbers.

“By launching this investigation, the CMA has recognized the seriousness of this issue,” Rosewell said in a Friday statement. “Privacy Sandbox would effectively create a Google-owned walled garden that would close down the competitive, vibrant Open Web. Providing more directly identifiable, personal information to Google does not protect anyone’s privacy. We believe that the CMA’s investigation will confirm this and save the web for future generations.”

A more private web

Google, naturally, has a different view.

“Creating a more private web, while also enabling the publishers and advertisers who support the free and open internet, requires the industry to make major changes to the way digital advertising works,” a Google spokesperson said in an emailed statement.

“The Privacy Sandbox has been an open initiative since the beginning and we welcome the CMA’s involvement as we work to develop new proposals to underpin a healthy, ad-supported web without third-party cookies,” the spokesperson continued.

Rosewell is skeptical about Privacy Sandbox’s “open” development because much of that discussion is taking place at the World Wide Web Consortium (W3C), the web’s main international standards organization. “There’s a view on privacy that is not open to debate or being challenged,” he told Fortune.

“A lot of people at the W3C say people want privacy, but people also want free stuff and plurality of the media,” Rosewell said.

Browsers, blockers, and Brexit

Apple’s Safari and Mozilla’s Firefox web browsers already started blocking third-party cookies.

Apple’s other big move in this arena is specific to its iOS mobile operating system. The company is preparing to force app developers to get explicit permission from iPhone and iPad users before tracking them for advertising purposes. The shift was supposed to happen in 2020, but pushback from the likes of Facebook led Apple to delay it until this year.

Facebook continued to lobby against Apple’s change by claiming to stand up for small-business advertisers. This week the media giant seemed to give in, telling businesses it had to show the opt-in prompt or face being blocked from the App Store.

Much as Google faces the ire of publishers and ad-tech companies in the U.K., Apple was in October the subject of an antitrust complaint from similar rivals in France.

The CMA’s official investigation is the first to be launched by the British regulator since Brexit took place over the New Year, taking the U.K. out of the jurisdiction of European Union competition rules. With that divorce now past, the U.K. is showing every sign of competing with the EU to see who can be harder on Big Tech.

As part of the crackdown on abuses by online platforms, the U.K. is creating a new, dedicated “digital markets unit” within the CMA this year.

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