Google on Wednesday announced plans to stop selling ads based on users' browsing history in an upcoming overhaul aimed at tightening up privacy.
The tech giant's parent company, Alphabet Inc, said that it will stop using and investing in technologies that track users on its Chrome browser as they move from site to site by next year.
Google has been working on proposals to remove from Chrome so-called third party cookies - snippets of code used by a website's advertisers to record browsing history in order to show users personalized ads - in an effort to meet growing data privacy standards.
In Wednesday's announcement the company confirmed that it will not replace third-party cookies with similar cross-site tracking technology.
For years, online ad technology companies including Google have been able to tell retailers to personalize an ad to someone after having tracked that person's searches the week before.
Without third-party cookies or technologies like them, such tracking across multiple websites is unfeasible.
Google is instead proposing grouping together web users with similar interests while keeping their unique identities private.
With the forthcoming changes, Google will still be able to track users itself through data collected from its services like Search, Maps and YouTube.
The company said the changes apply only to websites, not ad tools or unique identifiers for mobile apps.
Google on Wednesday announced plans to stop selling ads based on users' browsing history in an upcoming overhaul aimed at tightening up privacy (file photo)
In a blog post, David Temkin, Google's director of product management for ads privacy and trust, said the company continues to get questions on whether it will join others in the ad tech industry that plan to replace third-party cookies with alternative user-level identifiers.
'Today, we're making explicit that once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products,' Temkin wrote.
Google's proposals have drawn criticism from players in the online ad industry as well as scrutiny from regulators over concerns that it will add to the tech giant's already dominant power in online advertising.
Chrome is the world's dominant web browser, and many rival browsers like Microsoft's Edge are based on Google's Chromium technology.
Google accounted for 52 percent of global digital ad spending in 2020 with nearly $152billion, according to digital-ad consulting group Jounce Media.
Critics contend Google is banning rivals from building gigantic profiles on users, while developing for itself features in Chrome to continue to add to such dossiers.
Temkin disputed that notion in his blog post, vowing that Google will not to develop workarounds for itself and saying that it is committed to continue allowing targeting ads based on data that companies receive directly from consumers.
'If digital advertising doesn't evolve to address the growing concerns people have about their privacy and how their personal identity is being used, we risk the future of the free and open web,' Temkin wrote.
Google had announced early last year that it would remove third-party cookies in 2022 - after other major browsers Safari and Firefox did the same.
On Wednesday the company confirmed that it will not build or use any alternatives to replace the technology for its own ad-buying tools.
Instead, Google is testing a way for businesses to target ads to clusters of consumers with similar interests, which it says would protect privacy because it hides individual users in a crowd.
The technology, part of a project called the Privacy Sandbox, would use an algorithm to group people according to their common web browsing. Each group would have a minimum membership, so individuals can't be identified.
Big trade groups representing advertisers have called on Google to delay phasing out cookies until an alternative proves suitable. Google said in January that its tests show the clustering system could be effective.
Google's curtailing of unique tracking identifiers does have a few exceptions, the Wall Street Journal explained.
For one, websites will still be able to track 'first-party' data - which comes directly from a customer's activity on a specific site.
Advertisers on Google's services will also be allowed to continue targeting ads to specific clients for whom they already have contact information.
For example, an advertiser could target ads to someone signed in to their profile YouTube while they are on the site. However, once they leave YouTube, advertisers will no longer be able to target those ads on other sites.
Google has been working on proposals to remove from Chrome so-called third party cookies - snippets of code used by a website's advertisers to record browsing history in order to show users personalized ads - in an effort to meet growing data privacy standards
Google's changes come as it and other Silicon Valley giants including Facebook and Apple stare down a growing number of antitrust investigations amid allegations of anti-competitive practices.
In December Apple announced an upcoming iOS update that will require users to give permission in order for apps to track them for advertising purposes - a move that critics said would cripple small businesses.
Smaller ad firms that rely on cross-site tracking have accused Google and Apple of using privacy as a smoke screen for changes that hurt competitors.
Facebook is among the largest critics of Apple's iOS update. On an earnings call last month, CEO Mark Zuckerberg said: 'Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work.'
While Google noted that its latest changes will not affect apps, experts predict that apps will be involved in the overhaul going forward.
The UK's Competition and Markets Authority began investigating whether restricting cookies on Chrome will help Google increase its dominance in the online ad industry last month following a complaint from a group of marketers.
A Google spokesperson told WSJ that the company has been briefing the CMA as it moves forward with plans to phase out cookies.
Google also acknowledged that other companies could come up with cross-site tracking alternatives to use within Google's advertising infrastructure, but said that it will not use or invest in such tools for the adds it sells directly.
'We realize this means other providers may offer a level of user identity for ad tracking across the web that we will not,' Temkin wrote in the blog post.
'We don't believe these solutions will meet rising consumer expectations for privacy, nor will they stand up to rapidly evolving regulatory restrictions.'
Google reportedly briefed some of its largest ad clients on the changes, including Nestlé SA, which welcomed the news.
'We have long since recognized and advocated for the importance of first-party data, and it’ll become even more vital in a privacy-first world,' Nestle's global chief marketing officer Aude Gandon told WSJ.
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