The CMA explains that the investigation will assess whether the proposals could cause advertising spend to become even more concentrated on Google’s ecosystem at the expense of its competitors.

Third party cookies currently play a fundamental role online and in digital advertising. They help businesses target advertising effectively and fund free online content for consumers, such as newspapers. However, there have also been concerns about their legality and use from a privacy perspective, as they allow consumers’ behaviour to be tracked across the web in ways that many consumers may feel uncomfortable with and may find difficult to understand.

Google’s announced changes, known collectively as the “Privacy Sandbox” project, would disable third party cookies on the Chrome browser and Chromium browser engine and replace them with a new set of tools for targeting advertising and other functionality that Google says will protect consumers’ privacy to a greater extent. The project is already under way, but Google’s final proposals have not yet been decided or implemented. In its recent market study into online platforms digital advertising, the CMA highlighted a number of concerns about their potential impact, including that they could undermine the ability of publishers to generate revenue and undermine competition in digital advertising, entrenching Google’s market power.

The CMA says that it has been considering how best to address legitimate privacy concerns without distorting competition in discussions of the proposals with the ICO, through the Digital Regulation Cooperation Forum. As part of this work, the CMA has been engaging with Google to better understand its proposals. The current investigation will provide a framework for the continuation of this work, and, potentially, a legal basis for any solution that emerges.

The CMA has received complaints including from Marketers for an Open Web Ltd, which allege that through the proposals Google is abusing its dominant position. Given the importance and potential impact of Google’s proposed changes, the CMA was already considering the Privacy Sandbox, in conjunction with the ICO and Google. Given the concerns raised by the complainants, it has decided that this work should be conducted in the context of a formal investigation.

The CMA says that it 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. To read the CMA’s announcement in full, click here.