One of the newest challenges to Google’s techno-empire comes in the form of an interesting complaint about a new Google project called “Privacy Sandbox” that actually takes some of the advocacy playbook to heart, by limiting third-party cookies and certain kinds of individual tracking.
Reuters reports today that the UK’s CMA regulatory agency suggests that Google’s tracking restrictions will disenfranchise other advertisers like newspapers while giving Google a favorable advantage.
The CMA does admit that while the tracking might do this, it’s also disliked by individual users.
“(the CMA) said (the kinds of tracking being discussed) also present privacy concerns by allowing consumers’ behaviour to be tracked across the web in ways that many consumers may feel uncomfortable with and may find difficult to understand,” writes Tanishaa Nadkar at Reuters.
Google executives could be forgiven by pointing to a glaring contradiction and catch-22 in this kind of regulatory sentiment, especially since, at the same time, Google is facing no less than three antitrust lawsuits, and another $5 billion lawsuit for tracking individuals under its Incognito program where browser activity is supposed to be private.
“According to the complaint filed in the federal court in San Jose, California, Google gathers data through Google Analytics, Google Ad Manager and other applications and website plug-ins, including smartphone apps, regardless of whether users click on Google-supported ads,” wrote Jonathan Stempel for Reuters in June. “This helps Google learn about users’ friends, hobbies, favorite foods, shopping habits, and even the ‘most intimate and potentially embarrassing things’ they search for online, the complaint said.”
Looking at everything from a broader perspective, it seems that Google is under a lot of pressure to move in more than one direction to reform its operations. We’ll see what the class action lawsuit uncovers, as well as antitrust lawsuits from the US Department of Justice.
One thing that investors can take away is that tech stocks can come under pressure from the legal and regulatory challenges that tech companies face. It’s worth keeping an eye on Google’s responses and other aspects of this saga to understand whether it will have an impact on markets if you have holdings in the technology sector.
