The Competition and Markets Authority (CMA), the UK’s antitrust regulator, might as well be called Uncle CMA, because they have a message for the ad tech industry: “I want you!” (to submit your opinion on the Chrome Privacy Sandbox proposals).
The CMA is tasked with assessing whether the Privacy Sandbox – and Google’s planned deprecation of third-party cookies in Chrome – will create competition risks. If there are competition concerns, the CMA has the power to delay Google’s plans.
Gathering information from industry insiders is a critical part of the CMA’s evaluation process, said Chris Jenkins, director of the CMA’s Digital Markets Unit, during a virtual session at the IAB Tech Lab’s Privacy and Addressability conference in New York City on Thursday.
Since the CMA published its latest guidance on the Privacy Sandbox proposal at the end of February, 21 ad tech companies, publishers or industry associations have reported their concerns or submitted potential ways to redress those issues. Perhaps some applauded the sandbox APIs – the reports are confidential.
The feedback loop
This feedback helps “reiterate concerns” that were raised previously, Jenkins said, and makes those issues more concrete for the agency. But companies are also raising new concerns, some of which he said might be included as issues Google must address in the next quarterly report that publishes at the end of April.
Bear in mind that ad tech is a nuanced category, where insiders have far greater knowledge than regulators and auditors about how technology changes will affect day-to-day advertising and the flow of budgets. This isn’t like an FTC call for public feedback where 10,000 individuals, each nuttier than the last, get to vent their frustrations.
The CMA really needs the ad tech industry’s help, because they’re policy experts and economists – not ad tech product people. (And neither are the bankers at ING Bank, which is the monitoring trustee whose job is to assess whether Google is sticking to its commitments.)
That’s why ad tech companies need to test the Privacy Sandbox APIs and report the results and potential issues to the CMA. “This is important for us to try and get a constant handle” on how these proposals work in the wild, and not just in an abstract way, Jenkins said.
The purpose of Google removing third-party cookies in Chrome for 1% of traffic earlier this year was “very much not” the first step toward total deprecation, he said. Rather, it’s about enabling experiments and the next round of critical inquiries into the Chrome Privacy Sandbox.
Competition conundrum
But the CMA has a seemingly impossible task, which is to ensure that third-party cookie deprecation can move forward without creating additional market advantages for Google.
What happens, for instance, if a Privacy Sandbox proposal doesn’t overtly advantage Google – which would be an antitrust problem – but still relatively benefits Google’s ad tech?
“We are looking at the impacts on the market, [including] competitive position,” Jenkins said.
That means, in theory at least, a Privacy Sandbox proposal that doesn’t explicitly preference Google’s business could still be rejected if it creates too much of an advantage for the company more broadly.
But, Jenkins said, the CMA is primarily investigating the design of Privacy Sandbox tools and specifically whether they might allow Google to self-preference other of its own products.
During the Q&A portion at the end of the CMA’s Tech Lab session, an audience member raised the point that Google has the largest authenticated audience footprint, based partly on its ad tech network of tags and trackers and its logged-in users on Chrome, all of which Google counts as first-party data.
If the third-party ecosystem must only use authenticated audiences, it means Google inherently has a huge advantage, although the rule isn’t explicitly self-preferential.
“We are alive to it,” said Marcus Grazette, the CMA’s assistant director of data and technology insight, in reference to this dynamic of Google potentially gaining an advantage without bestowing a specific benefit upon itself.
For instance, one of Google’s commitments to the CMA is an agreement not to use all of the same data for targeting first-party audiences (such as YouTube or Google Search) as it does for third-party ad serving. This would mean that DV360, Google’s DSP, might not be able to use the same data set as YouTube.
“In our decision to accept commitments, we got into the possibility that there may be further restrictions,” Grazette said.
Help the CMA, help yourself
But for the CMA to effectively manage Google and its commitments, the agency needs more engagement from the ad tech community.
“One of the things that we’re particularly interested in hearing from market participants about is what further restrictions might look like from your perspective,” Grazette said.
In other words, the CMA doesn’t just want to hear gripes. It’s very open to hearing new ideas for how to level the ad tech playing field while also enabling third-party cookie deprecation.
The only obvious option now would be to force Google’s third-party ad tech business to commit to handicapping itself in some way, such as by not using certain Google-owned data sets.
But a Harrison Bergeron style of regulation is not appealing to a market economist.
Third-party cookie deprecation and other digital media changes, according to Jenkins, “are, frankly, likely to create some winners and losers in market.”
And when a market changes, that isn’t a competition concern in and of itself, even if it creates clear winners and losers, he said.
Still, some people in their heart of hearts do think the CMA will end up blocking the Privacy Sandbox proposals and giving third-party cookies another lease on life.
It’s highly unlikely, however, that the CMA will block third-party cookies deprecation from happening.
The CMA’s goal is not to prevent deprecation, but rather to ensure it doesn’t cause competition problems, Jenkins said.
“We were very clear from the start,” he said. “We don’t want to stand in the way of privacy-protecting changes.”
