Third-party cookies are trackers placed on websites that enable advertisers to follow users around the web, for instance displaying a product which the user viewed but did not purchase.The data that these cookies allow advertisers to collect on web users has provoked significant legal and privacy concerns, prompting Google to announce last year it would begin to phase them out in Chrome over the next two years.
But this has provoked controversy. Digital advertising is dominated by the use of third-party cookies, which the advocates for argue enable businesses to target their advertisements effectively to consumers who want to see them, and which fund fund free online content such as newspapers.Rival browsers Safari and Firefox already block third-party cookies, and a number of legal complaints allege that they should be prohibited in all browsers.
Ahead of any such complaint winning a ruling in its favour, Google aims to introduce a replacement technology which would stop identifying individuals based on their browser history and instead place them within large demographic cohorts.
The technology, Google says, would mean that people's web browsing history remains on their devices rather than being collated by advertisers. But advertisers have expressed concern at the impact the plan would have on their revenues.
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Google said its testing found the new system was 95% as effective as the old in terms of "the conversions per dollar spent when compared to cookie-based advertising" where a conversion refers to a user clicking on an advertisement or watching a video.The plan is currently being scrutinised by the UK's Competitions and Markets Authority which this month announced it is investigating whether the move would "cause advertising spend to become even more concentrated on Google's ecosystem at the expense of its competitors".
The CMA's chief executive, Andrea Coscelli. said: "As the CMA found in its recent market study, Google's Privacy Sandbox proposals will potentially have a very significant impact on publishers like newspapers, and the digital advertising market.
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"But there are also privacy concerns to consider, which is why we will continue to work with the ICO as we progress this investigation, while also engaging directly with Google and other market participants about our concerns," he added.