TLDR
- Google has abandoned its plan to phase out third-party cookies in Chrome
- Instead, Google will introduce a new prompt allowing users to choose their tracking preferences
- The decision comes after pressure from regulators and concerns from the advertising industry
- Google’s Privacy Sandbox alternatives failed to gain full industry support
- This change may significantly impact the digital advertising landscape
Google has announced it will no longer proceed with its plan to eliminate third-party cookies from its Chrome web browser. Instead, the tech giant will introduce a new prompt allowing users to choose how they want to be tracked across Google’s search products.
This decision marks a significant shift in Google’s approach to user privacy and digital advertising. Third-party cookies, which are small pieces of code that track users’ online activity across different websites, have long been a cornerstone of targeted advertising. However, they’ve also been criticized for invading user privacy.
Google first announced its intention to phase out third-party cookies in 2020, with an initial deadline of 2022.
This deadline was subsequently pushed back several times, with the most recent target set for 2025. The company’s efforts to replace cookies, known as the Privacy Sandbox initiative, included several experiments and proposals created in consultation with the broader ad industry.
However, these alternatives, such as FLoC (Federated Learning of Cohorts) and Topics API, failed to gain full support from industry partners and regulators.
Privacy experts raised concerns that some of these solutions could potentially make it easier for advertisers to gather user information, contrary to the intended goal of enhancing privacy.
Anthony Chavez, Vice President of Privacy Sandbox at Google, explained the company’s new approach in a blog post:
“Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time.”
This decision comes after considerable pressure from various stakeholders, including regulators like the UK’s Competition and Markets Authority (CMA) and Information Commissioner’s Office (ICO). These bodies had raised concerns about the potential anti-competitive effects of Google’s Privacy Sandbox proposals.
The advertising industry has also been vocal about its concerns. A gap analysis released by the IAB Tech Lab in February indicated that transitioning from third-party cookies to Google’s Privacy Sandbox would substantially hinder most current forms of digital advertising.
Adtech firm Criteo reported that the Privacy Sandbox could potentially erase publishers’ ad revenues by 60%.
Despite these concerns, Google maintains that ad performance can remain strong even without third-party cookies. The company cites recent tests showing high recovery rates for ad spend using Privacy Sandbox tools.
The impact of this decision on the digital advertising landscape could be significant. While Google’s threat to eliminate cookies may have come up empty, it did push the industry to become less reliant on cookies and more focused on privacy-forward ad-tracking solutions. Many firms have already invested in alternatives, such as Universal IDs that rely on hashed email and phone number data, and the collection of first-party data.
Google’s new approach bears similarities to Apple’s app tracking change introduced in 2021, which required users to opt-in to tracking. This move reportedly cost social media platforms nearly $10 billion in lost revenue.
The UK’s CMA has stated that it will carefully consider Google’s new approach, working closely with the ICO. The regulator welcomes views on the revised approach, including possible implications for consumers and market outcomes.
As the dominant player in the search market, commanding over 90% share, Google’s decisions have far-reaching implications for the entire digital ecosystem. While this move may be seen as a win for advertisers who feared the loss of targeted advertising capabilities, it also raises questions about the future of user privacy on the web.
Google says it will continue to work with regulators and engage with the industry as it rolls out this new approach. The company will also continue to make Privacy Sandbox APIs available and add anti-IP tracking protection for users in Incognito Mode.
