Google Ad Changes Face U.K. Review in First Shot at Big Tech
(Bloomberg) -- U.K. regulators are investigating whether a Google privacy initiative will hurt publishers’ ability to generate revenue, in the first big post-Brexitantitrust probe.
The Competition and Markets Authority said it will review Google’s move to curb the ways in which advertising data is collected because the move could “undermine competition in digital advertising, entrenching Google’s market power.”
The British investigation adds to Google’s legal headaches around the world. The Mountain View, California-based company faces lawsuits from the U.S. Department of Justice and multiple states over allegedly anticompetitive practices.
The increasingly tech-focused CMA is preparing to unveil a new digital regulator later in the spring with powers to rein in firms designated as holding strategic market status.
The new probe, however, comes before those changes, and focuses on Google’s decision to restrict cookies that help advertisers monitor customers’ browsing habits and pinpoint the effectiveness of different advertising. Google’s Chrome is the dominant web browser and the changes will be followed by rival products based on Google technology, such as Microsoft Corp.’s Edge.
Google, a unit of Alphabet Inc., said it would work with the CMA as it develops “new proposals to underpin a healthy, ad-supported web without third-party cookies.”
“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,” Google said.
Publishers and advertising technology companies complained in November that the privacy changes will curb members’ ability to gather information on web users, which helps them offer more valuable advertising. Smaller media companies are at risk of losing as much as 75% of their revenue, they said.
The complainants, known as Marketers for an Open Web, said the U.K. probe is “vital for the future of all online businesses, including publishers, technology businesses and advertisers.”
Privacy Vs. Competition
But the probe pits competition concerns against growing demands to protect users’ privacy on the web, said Verity Egerton-Doyle, a lawyer at Linklaters in London. Even as the CMA pursues an investigation, it will have to balance the needs of both camps.
“The complainants have framed this as too urgent to wait,” the antitrust specialist said.
The CMA said in a July report that phasing out of third-party cookies could hurt publishers’ ability to make money and invest in online content. It’s used Google data to estimate that U.K. publishers “earned around 70% less revenue overall when they were unable to use third-party cookies to sell personalized advertising but competed against others who could.”
The U.K. regulator has signaled it will take a tough stance on powerful technology companies after took on more responsibilities following the Brexit transition. It plans to set up a special task force to oversee digital markets.
Google has more than a 90% share of the 7.3 billion-pound ($9.9 billion) U.K. search market, the CMA said in July.
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