Google has announced an about-turn on controversial privacy changes that had triggered warnings of a catastrophic drop in revenue at news websites.
The web giant said it was dropping a plan to remove third-party cookies from its dominant Chrome browser, more than four years after first unveiling the proposals.
Website publishers had warned that the changes would block them from selling targeted adverts, leading to huge declines in sales and threatening the existence of smaller sites.
DMGT, the owner of the Daily Mail, said the change had reduced revenues by 31pc in testing on its websites.
Google first announced plans to phase out third-party cookies in 2019. The pieces of code are used to track web users across the sites in order to better target adverts.
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The company said it planned to replace them with its own system known as “Privacy Sandbox”, but the proposal was unpopular among websites and Google was accused of trying to capitalise on its dominance of the browser market.
The Chrome browser accounts for around two thirds of worldwide desktop browsing, according to SimilarWeb.
Google’s plan was investigated by the UK competition regulator after a complaint from Movement for an Open Web, a lobby group for publishers and advertising groups.
The investigation forced the company to submit to monitoring to ensure it did not gain a competitive advantage, and to consult with publishers.
However, the plan continued to be opposed by news websites. DMGT told the House of Lords this year that testing of Privacy Sandbox had reduced revenue by 31pc per 1,000 webpage visits.
It said: “It is hard not to draw the conclusion that, as feared, the result will be more control for Google and considerably less revenue for publishers.”
Google said that it was not dropping its plans entirely but would give users a choice, similar to how Apple manages its Safari web browser.
Anthony Chavez, of Google, said: “We recognise this transition requires significant work by many participants and will have an impact on publishers, advertisers, and everyone involved in online advertising.”
James Rosewell, the co-founder of Movement for an Open Web, said: “This is a clear admission by Google that their plan to enclose the open web has failed. Their goal was to remove the interoperability that enabled businesses to work together without interference from monopolists but a combination of regulatory and industry pressure has put paid to that.”
However, the Information Commissioner’s Office, the UK’s privacy regulator, said it was “disappointed”.
“We are disappointed that Google has changed its plans and no longer intends to deprecate third party cookies from the Chrome browser,” said Stephen Bonner, the deputy commissioner.
“From the start of Google’s Sandbox project in 2019, it has been our view that blocking third party cookies would be a positive step for consumers.”
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