The UK’s Competition and Markets Authority (CMA) is closely monitoring developments in Google’s Privacy Sandbox initiative, despite the tech giant’s major shift in strategy announced earlier this year.

Big picture. Google’s initial plan to phase out third-party cookies in Chrome is subject to intense regulatory and industrial oversight. In a surprise move in July, the tech giant announced it would give users the choice to allow or limit third-party cookies.

What’s new. In its latest assessment published on November 11, the CMA found that competition concerns around the Privacy Sandbox persist, even with Google’s revised approach. The regulator is now working with Google to update existing commitments to address these ongoing issues.

Key details:

• The CMA says its “view is that competition concerns remain under Google’s revised approach” and wants to ensure any changes will support continued competition in digital advertising.
• Specific areas of concern include Google’s control over the Topics API taxonomy, bidding dynamics in the Protected Audience API, and limitations in the Attribution Reporting API.
• Questions also arise about the impact of requiring trusted execution environments, which some see as potentially beneficial to Google’s own cloud platform.
• If the CMA fails to agree updated commitments with Google, it warns it will consider further enforcement action.

Why we care. The CMA’s ongoing monitoring highlights the strategic importance of the Privacy Sandbox and its potential implications for the entire digital advertising ecosystem.

Potential regulatory changes could result in adjustments affecting advertising targeting, competitive dynamics and transparency within the advertising landscape, which could impact campaign strategies and audience reach.

What’s next. The CMA is planning a public consultation on any proposed changes to the commitments in the fourth quarter of 2024. Industry stakeholders, including ad tech companies and publishers, will have the opportunity to provide feedback.

The Information Commissioner’s Office (ICO) also remains closely involved, keen to ensure competition and privacy are protected as the Privacy Sandbox evolves.

Bottom line. Despite Google’s abandonment of a total depreciation of third-party cookies, the The CMA is closely monitoring the development of the Privacy Sandbox. The regulator wants to ensure that any changes preserve competition while protecting user privacy.