Australian Competition and Consumer Commission chairman Rod Sims says the regulator is aware that moving to a more transparent and strident pro-consumer privacy regime and the collapse of the third party cookie economy in 2022 risks handing Facebook and Google more market power than they have today. 

These concerns have emerged in Europe after GDPR’s introduction in May 2018. 

The end of third party cookie user tracking across the open web in 2022 was being assessed in the ACCC’s inquiry into the adtech and advertising agency supply chain, Sims said. 

In 2022 Google Chrome has announced it will follow Apple’s Safari browser which blocks third party cookie tracking entirely. Cookies, which are pieces of code dropped onto a user’s browser so they can be tracked, underpin almost the entire online targeting and advertising sector. 

In a media briefing last week on the release of an ACCC concepts paper for striking a mandatory news media revenue-sharing code with the digital platforms in which Nine and News Corp have argued Facebook and Google should pay out $600m-$1bn annually, Sims responded to Mi3 questions on the market consolidation effect that tougher privacy rules and a wholesale shift from cookies to authenticated user IDs might have.  

“Oh, I do see that as a risk,” he says. “We had recommendations on privacy in the digital platforms inquiry and the government has accepted some of them but is still thinking about others. The question you raise is central to their thinking. There’s no question that this privacy issue and consolidation of market power is really important. We’re looking at it in the adtech inquiry and we’re looking at it also from just a general competition view. We’re watching what’s happening overseas as well to see the effect of GDPR has had. We’re trying to learn as much as we can.”

When Google implements its ban on third party cookies in 2022 – Apple’s Safari already does, shutting out 30% of the effective browser market and essentially sidelining most iPhone users from ad targeting – former Westpac digital and media technology director Nick Barnett says it will render 85% of current digital marketing useless. 

But it will trigger a stampede by companies and media companies to logged-in, first party user IDs, in which Facebook and Google are well advanced. 

The effect is that advertisers and agencies will likely opt for the fastest, easiest solution to address the collapse in third party cookies and swing more media and advertising budgets to the digital platforms.

Sims said he was not going to predict outcomes on how much Google and Facebook should pay newsmedia companies in the mandatory code. “What I’m going to predict is that we will even up that bargaining position [between media companies and digital platforms] and come out with a better position than where we are now.” 

The ACCC’s adtech inquiry will release its findings by year’s end and the mandatory bargaining code by July.