The online advertising ecosystem—tech firms, publishers, and everyone else involved in the funding of our digital economy—has been working flat-out to get ready for major Google privacy changes later this year. After all, Google will be revolutionizing online privacy when it stops letting other companies’ cookies track Chrome users, and preparing for what comes next is an existential step for many players.
As it turns out, the rush wasn’t necessary.
On Thursday, Google stunned the sector by announcing a two-year delay to its phaseout of Chrome’s support for third-party cookies—a longstanding technology that will need replacing by something else, most likely an alternative tracking technology called FLoC that is being developed in a Google initiative called Privacy Sandbox.
That means Chrome, the world’s biggest browser, will only free its users from widespread tracking by these cookies in late 2023, rather than late this year as originally planned.
This was fantastic news for the companies that make their money by tracking people across the web, often without their knowledge. The French display-ad company Criteo saw its share price leap by over 12%. Shares in the U.S. Ad-tech firm PubMatic also rose by nearly 13%. The Trade Desk, another big American ad-tech player, was up more than 16%.
“More time is needed”
“It’s become clear that more time is needed across the ecosystem to get this right,” wrote Chrome privacy engineering chief Vinay Goel in a blog post. “We need to move at a responsible pace. This will allow sufficient time for public discussion on the right solutions, continued engagement with regulators, and for publishers and the advertising industry to migrate their services.”
The regulatory aspect is key here. Google and the U.K.’s antitrust and privacy regulators have come to an arrangement (which is currently open for consultation) under which the British watchdogs will hold Google’s hand as it designs FLoC—an A.I.-based system in which web users will be lumped into categories for targeted-advertising purposes, rather than being tracked individually—or whatever replaces third-party cookies.
The deal obliges Google to pause for at least 60 days before making the Privacy Sandbox changes, so the U.K. Competition and Markets Authority (CMA) can first check that publishers and Google’s ad-tech rivals won’t be unfairly disadvantaged.
In that event, Goel indicated in Thursday’s post, Google will give advertisers and other ecosystem players nine months to get their act together, once FLoC is ready to roll in late 2022. Chrome will then phase out support for third-party cookies over a three-month period.
That should please the British regulators, and it might also help Google navigate a recently announced EU antitrust investigation into its ad-tech practices—a probe that will look into the Privacy Sandbox changes, among other things.
Addressing criticism
News publishers have been among the loudest critics of Google’s abandonment of third-party cookie support, and the Save Journalism Project—an organization that claims to push back against Big Tech’s influence over the news industry—reacted to the latest announcement by saying it did not go far enough.
“Google has already taken so much from journalists,” said spokesman Nick Charles. “They need to kill this once and for all. They’ve seen how much people are opposed to FLoC, they’ve seen the regulatory and legislative blowback, and they know they have to stop. But instead, they’re going to drag this out for another two years, leaving the industry hanging.
“In some ways, two more years is just cruel—how is anyone supposed to run a news organization with Google’s indecisiveness hanging over them?”
Indeed, FLoC’s early iteration, which Google has been testing for months, has many opponents. Even privacy advocates don’t like it: The Electronic Frontier Foundation, the world’s most prominent digital rights group, says it would create new privacy risks and help online services discriminate against some users.
Google’s Goel addressed the criticism in his blog post, saying the two-year delay would help “avoid jeopardizing the business models of many web publishers which support freely available content,” and added that getting the post-cookie paradigm right would “help ensure that cookies are not replaced with alternative forms of individual tracking, and discourage the rise of covert approaches like fingerprinting.”
Jason Kint, a longtime Google antagonist and CEO of the Digital Content Next trade association, responded to Google’s announcement by tweeting that it shows Chrome is “not actually a user agent. It’s optimized as a surveillance and behavioral ad targeting vehicle for advertisers.” He recommended that Chrome users switch to another browser that already blocks tracking, such as Firefox, Safari, or Brave.
Correction: This article was amended on June 28 to note that Jason Kint is the CEO, not the founder, of Digital Content Next.
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