Google’s Cookie Delay Reveals Industry Fears

Google announced last month that it would delay the end of third-party cookies in Chrome until early 2025, as regulators in the United Kingdom raised concerns that alternatives could give the search giant an unfair advertising advantage.

The delay could also indicate that the advertising industry is not ready for the end of tracking cookies in the world’s most popular browser.

Regulatory Concern

The U.K.’s Competition and Markets Authority (CMA) prompted Google to delay the demise of tracking cookies because it was concerned that the company’s Privacy Sandbox, the replacement for third-party cookies in Chome, would give Google Ads a competitive advantage.

The delay is supposed to allow the folks at Google time to work with the CMA and meet multiple demands, including:

• No competitive advantage to Google’s own ad products and services versus competitors.

• More collaboration. Google must release a cookie alternative that benefits the entire advertising ecosystem.

• Data protection to ensure advocates are satisfied with Google’s Privacy Sandbox.

• Testing and reporting. Google will provide evidence that its cookie alternatives are effective and don’t negatively impact its competitors.

In its published response, Google stated, “We recognize that there are ongoing challenges related to reconciling divergent feedback from the industry, regulators, and developers, and will continue to engage closely with the entire ecosystem. It’s also critical that the CMA has sufficient time to review all evidence, including results from industry tests, which the CMA has asked market participants to provide by the end of June. Given both of these significant considerations, we will not complete third-party cookie deprecation during the second half of Q4.”

Privacy Challenge

In addition to regulatory concerns, privacy advocates had asked Google to delay the release of its Privacy Sandbox, believing it’s not much better than third-party cookies.

Some fear the Privacy Sandbox — despite collecting less information about individuals and offering alternative ways to deliver targeted advertising — enables Chrome to act like an ad server and concentrates data storage within the Google ecosystem.

Delaying the release is meant to address those concerns.

Advertising

Google announced in 2022 that it would eliminate tracking cookies in Chrome. Other web browsers have discontinued those cookies without much fanfare, but Chome is different.

According to Statista, Chome had a dominant 65.7% share of the worldwide browser market in February 2024.

Thus much of digital advertising will change when Chrome finally removes tracking cookies, impacting multiple sectors:

• Chrome users. Third-party cookies facilitate ad targeting — showing folks relevant and interesting ads.

• Ad networks. Companies in the business of delivering ads, including Meta, Criteo, and similar, will “lose signal,” meaning they will have relatively less behavioral data for ad targeting.

• Advertisers. Signal loss likely means ads become less effective and more expensive, similar to the effect of Apple removing tracking in iOS 14.5 in 2021.

The Privacy Sandbox was supposed to address these advertising concerns, delivering relevant ads to benefit users and advertisers.

Hence this most recent delay — prompted by regulators (focused on competition) and privacy proponents — may indicate that the advertising industry is not ready to give up tracking cookies.

For example, while some complain that the Privacy Sandbox retains too much data in the Google ecosystem, alternatives have the same problem. Examples include Liveramp’s Authenticated Traffic Solution and Criteo’s Commerce Media Platform, both of which are advertising platforms. Even Unified ID 2.0, the open-source alpha-numeric identifier, gets much of its support from The Trade Desk, a platform for advertisers.

Better Alternatives?

Bottom line, the advertising industry faces a complex challenge in transitioning away from third-party cookies, a deeply embedded system.

As they explore replacements such as the Privacy Sandbox, Google and other stakeholders confront the technical and competitive implications and the industry’s reluctance to adapt to fundamentally different alternatives.

While better for user privacy, these new technologies introduce complexity and fragmentation that could lead to less effective advertising outcomes and steep implementation hurdles.

The ongoing delays signify a market cautious about relinquishing a tried-and-tested mechanism without clear and proven alternatives.