Google Sandbox: The Internet and Its Oligopolization

By Jochen Schlosser, CTO at Adform

How much “privacy” is actually in Google’s privacy sandbox? I fear a further oligopolization of the internet if no countermeasures are taken.

“… all men are created equal …” – so says the second paragraph of the United States Constitution. Of course, the reality is often not that simple and what should apply to men is far from being true in competition law. Here, too, there should be equal and fair opportunities for all. A dominant position in a market should not be allowed to be abused. And the influence of one or more partners in this context must not lead to a market becoming encrusted and there no longer being equal opportunities for smaller or new players.

Renaissance of the “Advertising-Funded Internet”

And that brings us to the internet: The dominance of global platforms is increasingly coming into focus, also and especially in the field of digital advertising. For years, it has been said that the world is moving in the direction of “subscription services,” which of course entails its own challenges in the context of free access to information. But what has actually happened? We are experiencing a renaissance of the “advertising-funded internet” with growth rates in the higher double digits. The big players see themselves as pioneers of this second flowering and are steadily raising their own walls.

How open and free the internet of the future will be is one of the key questions in the interaction of all participants. The focus here is primarily on the ongoing discussions around the major changes in browsers, particularly worth mentioning here: The Privacy Sandbox of Google Chrome!

Look into the box

A lot has been written about the Privacy Sandbox, but at the moment it is actually worth taking a look at the box again. One component of the box is called “First Party Sets.”

What exactly is that? It must have something to do with privacy. The Technical Accountability Group of the World Wide Web Consortium (W3C) is skeptical and questions the effectiveness of the Privacy Sandbox initiative in this context, the group even says that “the First Party Sets are harmful the web in its current form.’ So somehow this sounds more like the opposite.

So, what exactly do the Privacy Sandbox and its First Party Sets do? Broadly speaking, IDs that do not belong to the visited website itself – so-called 3rd party IDs – are banned. However, the First Party Sets allow certain groups to measure across website boundaries. Sounds a bit like third-party cookies as we know them today, doesn’t it?

Open questions

The questions that now arise:
Who is allowed to track across the board in the end?
Who gives a company the corresponding permission?
And who has control here and exercises it?
Are smaller companies allowed to join forces?
Is Google allowed to operate such a set with YouTube?
Is a large publisher allowed to track across all its sites?
How and where exactly are boundaries drawn here?

It’s a damn hot topic. The one who is allowed to operate such a set enjoys great advantages, as he can achieve economies of scale and thus ultimately provide reach and audiences against which smaller, or individual websites look pretty old. Unfortunately, it smells like a further oligopolization of the internet is imminent, as this would concentrate the flow of advertising budgets even more on a few big players. The open and diverse internet is at least under extreme pressure on such a basis.

Imbalance and little transparency

Not only could large publishers gain market power with the first party sets, but also the large multi-brand advertisers would probably have more power in this new construct than smaller advertisers. This is a risk for the heterogeneous internet, in which everyone should have the same opportunities.

In addition, in the future, a user will have to read in the imprint of the respective website and in the browser configuration who operates which the first-party set in order to gain any transparency at all about who does what and what information they have about them. I’m not sure how much better this is supposed to be compared to the “old system.” Most importantly, who defines who can do what and who has to disclose what and where? Is a big publisher with 1000+ domains still a first-party set candidate? The question of who ultimately has the say in such decisions remains exciting. In the end, however, it should be the user who has the choice, not the browser!

Dr. Jochen Schlosser is Chief Technology Officer at Adform, one of the world’s largest platforms for advertising technology. For more than 15 years, he has been one of the leading minds for data topics and strategies in the market and has held leading positions in various industries (pharma, finance and of course marketing). Before joining Adform, Jochen was a member of the management team at uniquedigital (SYZYGY Group) and in this position, he drove the topic of data-driven marketing within the group. As a Ph.D. in computer science – with a minor in psychology – he passionately talks writes and tweets about everything digital and its impact on our daily lives.