• by Wendy Davis  @wendyndavis, March 17, 2021

Google's plan for cookie-less targeted ads is “anticompetitive” and “will further expand the already-dominant market power of Google’s advertising businesses,” Texas Attorney General Ken Paxton and other law enforcement officials say in an amended antitrust complaint against the company.

“Google is trying to hide its true intentions behind a pretext of privacy,” Paxton and attorneys general from 13 other states and Puerto Rico write in papers filed Tuesday in U.S. District Court for the Eastern District of Texas. “Google does not actually put a stop to user profiling or targeted advertising -- it puts Google’s Chrome browser at the center of tracking and targeting.”

Google's upcoming “Federated Learning of Cohorts” plan, unveiled earlier this month, relies on placing Chrome users into audience segments, or “cohorts,” based on their web-browsing activity, and then transmitting data about those segments directly to publishers through a Javascript API.

Google previously said its Chrome browser will block ad-tech companies and other third parties from setting cookies by 2022.

Google touts the new Federated Learning of Cohorts as an “innovation,” arguing that the cohort-based targeting method will be less personalized than cookie-based targeting. But privacy advocates have raised concerns about the plan, noting that it still relies on tracking people across various websites in order to target ads.

The antitrust battle dates to late last year, when Paxton and other attorneys general claimed in a lawsuit that Google engaged in conduct aimed at squelching competition for online display advertising. (Google is also facing other antitrust lawsuits, including one by the federal government.) 

The amended complaint filed by Paxton Tuesday repeats some of the prior allegations, along with new ones related to Google's plans to target Chrome users based on their web-browsing history.

"By blocking cookies, and through proposals in Privacy Sandbox, Google forcibly inserts itself in the middle of publishers’ business relationships with non-Google advertising companies, cutting off publishers’ ability to transact with rivals without also going through Google," the complaint alleges.

"Google does not put a stop to Google’s tracking of users on Chrome; it does not put a stop to Google’s tracking of users through cookie workarounds; it does not put a stop to Google’s tracking of users across the largest sites in the world,” the attorneys general add. “In fact, the new Google Chrome tracking groups create something akin to a Google social credit score based on group identity.”

Google hasn't yet responded to MediaPost's questions about the new allegations.

The digital rights group Electronic Frontier Foundation said earlier this month that Google's cohort-based advertising plan is a “terrible idea,” and a “misguided” attempt to reinvent behavioral targeting.

The organization flagged a few privacy issues posed by the cohort-targeting plan, including that Chrome users will no longer be able to surf the web without also transmitting information about their potential interests.

“Every site you visit will have a good idea about what kind of person you are on first contact, without having to do the work of tracking you across the web,” the group wrote.

The organization also warned that any information sent by Chrome to publishers can serve as a data point for device fingerprinting -- a tracking technique that involves identifying users based on data about their computers, including operating systems, IP addresses, browser versions, installed fonts and plug-ins.

Privacy considerations aside, whether Google's cohort-targeting plan raises antitrust issues could depend on questions that haven't yet been fully answered, according to antitrust lawyer Charlotte Slaiman, the competition policy director at advocacy group Public Knowledge.

“I've been concerned from a competition perspective since Google first started talking about this idea a while ago,” she says.

The main concern, according to Slaiman, centers on how much data about Chrome users' web-browsing history Google will retain for its own use.

The company has said its current plan involves drawing on Chrome browsing data to place users into audience segments.

But any potential plan by Google to exploit more granular data about people's web-browsing than the information it will send to publishers could raise a competition concern, Slaiman says.

Paxton isn't the first to claim that steps hailed by tech companies as pro-privacy are also anticompetitive.

Business groups in Europe, including the Interactive Advertising Bureau France, brought an antitrust complaint against Apple in the EU over planned privacy settings that will require consumers to opt in to tracking on an app-by-app basis.

This week, regulators in France rejected the business organizations' request to immediately block Apple from moving forward with the settings.

But the regulators said they will continue investigating, with an eye toward verifying that Apple wasn't “self-preferencing” -- meaning that it isn't treating apps by third-party developers differently than its own apps.

Fears that attempts to increase online privacy can harm competition are not new.

In 2013, former Federal Trade Commissioner Maureen Ohlhausen raised concerns about the agency's recommendation for a do-not-track tool that would allow consumers to easily opt out of all online behavioral advertising.

“New privacy restrictions may have an effect on competition by favoring entrenched entities that already have information, over new entities,” she said at the time.

Eric Goldman, co-director of the High Tech Law Institute at Santa Clara University, adds that there is an “important and under-appreciated interface between privacy and antitrust.”

He says moves by large tech companies aimed at increasing privacy by preventing third parties from accessing data are also likely to result in consolidation, because those moves would leave large first parties in possession of the most data about consumers.

“That puts companies like Google and Facebook in a no-win position,” he says.