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Introduction

On Friday, April 26th, the UK’s Competition and Markets Authority (CMA) released its Q1 2024 report on the rollout of the Google Privacy Sandbox (GPS). This report is the CMA’s eighth assessment of the GPS and its effectiveness in replacing cookie technology without granting Google an undue advantage in the advertising sector.

This Q1 CMA report is particularly significant for both Google and the broader industry, as it clearly indicates that Google must do more to prove that the current design of the GPS is not anti-competitive. Additionally, the report is reinforced by a preliminary assessment from another UK regulator, the Information Commissioner’s Office (ICO), which monitors privacy and data protection in the UK. The ICO has drawn heavily on its previous reports on real-time bidding and online advertising from 2019 and 2021 to outline the expectations for a compliant approach to the GPS within the CMA report.

CMA Competition Concerns

The core of the CMA report remains consistent, with the CMA maintaining that Google must limit the use of its first-party data to prevent it from dominating ad spend. However, Google seems further from convincing the CMA that the GPS is not anti-competitive and complies with established privacy standards than it was in January. The Q1 report highlights 79 concerns, compared to 39 in the previous January report.

The CMA is keenly aware that ad spending could shift from open display to owned-and-operated inventory or walled gardens. Moreover, certain design elements of the GPS appear to favor the Google ecosystem. For instance, Google Ad Manager (GAM) will not take part in Protected Audiences API (PAAPI) auctions unless it is the top PAAPI seller, which forces publishers to use GAM to access AdX demand. The CMA has rightly identified this as a "high-priority area" for its assessment and review.

Google has stated, “We welcome the dialogue with the ICO and are actively working to address its feedback on how Chrome can better inform users about the Privacy Sandbox. We also support the ICO’s call for sites and ad tech companies using Privacy Sandbox APIs to communicate transparently with users and provide adequate controls.” Below are some of the key privacy concerns highlighted.

Privacy Assessment by CMA & ICO

Topics API

Google shows reluctance to acknowledge the crucial role that governance and access controls play in ensuring compliance with privacy regulations. The Topics API allows API users to access cross-site insights without restrictions from Google on the use of topics data, which could be used beyond just interest-based advertising. Google has stated that they perceive the overall risk as "low," but the lack of mechanisms to prevent abuse of the Topics API makes it nearly impossible to consider it privacy compliant. The W3C has raised similar concerns after testing the GPS, but Google has yet to make any adjustments based on this feedback. For those familiar with the requirements of Article 5 of the GDPR and the principle of purpose limitation, this poses a significant red flag.

Protected Audience API

Google plans to roll out the Protected Audiences API (PAAPI) without incorporating essential privacy-enhancing technologies (PETs), some of which won't be operational until 2026. While Google has stated that they are working on privacy mitigations for cross-site tracking risks, these may not be finalized by the time of deployment. The ICO is concerned that the lack of crucial controls outlined in the current roadmap will leave significant privacy risks unaddressed.

The CMA has noted that it is possible to create interest groups (IGs) tailored to individuals, potentially enabling the use of cross-site data and third-party profiles within PAAPI. Consequently, the ICO has expressed concerns that combining first- and third-party data in PAAPI may not resolve various data privacy issues, potentially leading to non-compliance with applicable data protection laws.

The CMA has suggested that privacy has not been a primary focus for Google in their enhancements to PAAPI within the GPS framework. Google has made several updates to the original PAAPI design, focusing on utility and adoption (such as removing k-anonymity controls for IGs). This has led the CMA to express concern that "privacy is not appropriately considered by Google." Over time, this could result in PAAPI evolving in a way that may not comply with applicable data protection legislation.

Attribution Reporting API

Conclusion

The ongoing exchanges between Google and the CMA seem like a battle of endurance, but given that Google provided legally binding commitments to the CMA in 2022, they may need to make concessions regarding their third-party cookie replacement. Several critical questions still loom for the industry: Does the GPS operate as intended? Can it undergo thorough testing? And how effective will it be as a replacement for third-party cookies when some essential components are not yet developed?

The CMA is relying on the ICO's support for privacy analysis, and the ICO has clearly outlined its expectations for Google. They insist on a privacy-by-design approach that provides users with transparent choices and ensures accountability for how personal data is managed throughout the online advertising ecosystem. This processing must have a well-defined purpose and address existing privacy risks. Balancing these requirements while ensuring fairness for all market participants presents a significant challenge for Google.

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5. Optimize for Viewability:

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By adopting these strategies, publishers can secure a substantial share of the increased ad spending during political seasons and boost their overall revenue. If you're already working with Admonetize and want to maximize your revenue for the 2024 presidential election, contact your customer success manager today. If you're not yet a partner, please reach out to advertiser@admonetize.net to get started.