On Friday 11 June 2021, the Competition and Markets Authority (“CMA”) announced that it was minded to accept undertakings from Google to settle its antitrust investigation into the company regarding its ‘Privacy Sandbox’ proposals.
The CMA launched its investigation in January 2021, following complaints from industry, including Marketers for an Open Web, a consortium of companies affected which is represented by Preiskel & Co’s Competition and Antitrust team.
The ‘Privacy Sandbox‘ is a collection of proposed changes to Google’s browser, Chrome, and browser engine, Chromium. The proposed changes include the removal of third party cookies, the replacement of direct log-in with a login system via the browser (“WebID“), the hiding of IP addresses from website publishers by running all traffic through Google’s servers (“Gnatcatcher“), and the deprecation of the User Agent String, a part of the HTTP communications protocol which tells websites certain information about the device accessing the website, and replacement with User Agent Client Hints.
As indicated by the name for the group of proposals, Google has claimed that they are being implemented in order to address user privacy concerns. However, concerns have been raised by Marketers for an Open Web and others. These concerns include that the browser changes would allow Google to continue to gather data which it monetises through advertising while preventing Google’s competitors in digital advertising from accessing the same data, and that there is very little user choice built into the proposals, raising questions about compliance with data protection legislation.
Such concerns caused the CMA to open its investigation, the first Competition Act 1998 investigation announced after the end of the Brexit transition period, and work with the Information Commissioner’s Office (“ICO”) to consider the implications of the proposals. The announcement of the consultation follows a recent joint statement from the CMA and the ICO on how they consider regulators should approach questions of competition law and data protection law in digital markets.
Following almost six months of investigation, the CMA has confirmed that it considers that the ‘Privacy Sandbox’ proposals raise competition concerns. Google has submitted proposed undertakings, legally binding commitments to modify its behaviour to address such concerns, which the CMA provisionally considers appropriate.
The proposed undertakings would give the CMA an oversight role in the development and implementation of the changes to the browser. This is understood to be the first time that commitments to end an investigation would include such an involved ongoing role for the CMA, and indicates that the CMA is flexing how it applies its powers to address some of the difficulties which arise in competition law enforcement in digital markets.
Stakeholders are invited to provide submissions to the CMA on the proposed undertakings, in particular on whether the proposed commitments are sufficient to address the competition concerns highlighted regarding:
- unequal access to the functionality associated with user tracking;
- self-preferencing Google’s own ad tech providers and owned and operated ad inventory; and
- imposition of unfair terms on Chrome’s web users.
Please contact Tim Cowen if you have any questions regarding the CMA’s investigation or the consultation.