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Google has delayed plans to end third-party cookie support on its Chrome browser by nearly two years, after pushing for an idea that falls on one of the foundations of the current online advertising industry.
The search engine said it hoped to allow more time to debate with regulators and companies related to digital advertising and to “avoid jeopardizing the business models of many web publishers that support open access content.”
The break was greeted with relief from the world of digital advertising, which has faced uncertainty with the impending end of one of its main ways to target online messaging. Shares of Trade Desk, an American company that has been trying to gain support an alternative form of targeted ads, it jumped 17% in the news, while French advertising technology company Criteo rose 11%. The delay will give the online advertising industry more time to refine alternatives to cookies, said Youssef Squali, an analyst at Truist.
Third-party cookies, pieces of code that are planted in a user’s browser to record which websites they visit and help advertisers target personalized advertising, have been on for years. Apple’s Safari browser and Mozilla’s Firefox already block them by default.
However, Chrome accounts for about two-thirds of the browser market, making its impact much greater. In addition, Google’s dominant position in many other parts of digital advertising has raised concerns that it could use the end of cookies (and the replacement system it plans to use in Chrome) to take advantage of rivals.
Two weeks ago, the UK Markets and Competition Authority said yes worried that Google was “determined to continue with the changes[to cookies]. . . in a way that outperforms its own businesses and limits competition from its rivals. ”But he added that the additional commitments offered by Google would lessen the danger, including the company’s promise not to make any changes without first giving the regulator 60 days to review them.
This concession could lead to a conflict between regulators over who plays the lead role in overseeing Google’s ad systems. The European Commission announced this week its own antitrust investigation into Google’s advertising technology business, including the proposed end of cookies.
Google has proposed replacing cookies with a new, more private method of tracking users’ online interests, known as Floc. Personal browsing data would be stored and analyzed within a user’s browser, rather than sent to other companies. Users would be grouped into cohorts based on their interests and the rest of the online advertising industry could use this aggregate data to target their messages.
Some critics have questioned whether Google would be there an unfair advantage because he would have total control over how the cohorts are designed. Also, if the new system makes specific advertising less efficient, Google could benefit indirectly, as its direct relationship with users still gives it access to a lot of its own data that rivals can’t match. The company has said its own tests showed that advertisers could expect the Floc system to be 95% as efficient as cookies.
The company has also faced the backlash from privacy experts who question whether private data can still be leaked. According to an analysis by the Mozilla open source group, the new Floc system “could create significant risks if deployed widely in its current form.”
Google said it hoped to complete its own cookie substitution tests by the end of next year, after which advertisers and publishers would have nine months to migrate their own systems to the new technology. He added that the cookies would be phased out over a three-month period by the end of 2023. Originally, the company had set a deadline for early next year to get rid of the cookies.
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