Google has their hands in the cookie jar

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SvD Näringsliv

This column was first published in SvD Näringsliv, in Swedish, on March 4th, 2021.

The battle for internet advertising is escalating. But that Google is changing the technology that determines which ads you see is not only done to prevent tougher rules – it is also done to make it more difficult for smaller competitors.

The question of your ad data has polarized Silicon Valley for many years. On one side you have Apple, which is pushing a very hard line against data collection. Since Apple does not sell ads nowadays, they have very little to lose with this stance. On the other side are Google and Facebook, which have ads as their primary business model, and which dominate the digital advertising market worldwide.

Now this balance of power is about to be shifted. It started when Google announced that it intends to remove support for so-called third-party cookies by the end of next year. This means that it becomes more difficult to track consumer behavior between different sites. For you as a consumer, this means that you can avoid seeing that shoe ad wherever you surf, just because you once happened to click on a pair of shoes at a web shop. The announcement comes just a few months after Apple also changed the rules for advertising on its platform iOS and in its browser, Safari, which is the second largest on the market.

Google has a lot of power in the advertising world. First, they are one of the world’s largest advertising companies and thus influential in what is considered the standard. Second, they own by far the largest browser, Chrome, and can use it to determine the type of technology that advertisers are allowed to use.

Why is this happening now? Politicians’ interest in data and privacy issues has increased a lot and is expected to be the focus of future legislation and regulation. The changes that Google makes should thus be seen as a way to prevent something that would probably need to be changed anyway. But acting early they can gain more political leeway. Google itself refers to “users demanding more data integrity, which includes transparency, choice and control over how their data is used”. That is certainly true, but this change will not take place until the end of 2022. It is reasonable to assume that users would like to have more data integrity straight away.

The second reason for the timing is that it hits harder on their competitors than on Google itself. The IT giant will continue to track your behavior on its own sites. So if you use their search engine, watch Youtube or read emails on Gmail, Google will still link that browsing behavior. And it’s no small feat – Alphabet (which owns Google) reaches billions of people through its services. For ad networks that do not control equally large sites, however, it becomes much more difficult. And it almost forces competitors like Facebook to adapt their way of controlling ads as well.

Google’s self-regulation will not stop any ongoing legal processes. Of course, Google knows that. Instead, the outcome may cement another problem – that of a fair market where everyone works with the same set of rules.

When Google itself changes the global standard for digital ads, it does so in a way that benefits them. They have tens of thousands of employees working on these issues. Not all companies have the cost and resources required in order to be able to keep up.

Google has benefited from the unregulated system that made them market leaders. Now they are introducing a new standard that ensures that they stay that way.

This column was first published in SvD Näringsliv, in Swedish, on March 4th, 2021.

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