Stephen Dnes, Preiskel & Co

Not-for-profit Marketers for an Open Web Limited (MOW) was formed in September 2020 to represent a consortium of firms adversely affected by Google’s proposed changes to its browser, known as the Privacy Sandbox.

Preiskel & Co partner Tim Cowen led the small legal team of four lawyers, including Stephen Dnes and Claire Barraclough as lead associates, representing MOW as it took on the might of Google. “This case will set major precedents on how competition law interacts with data protection law. This has been debated for many years, but in this instance, it will be necessary for the regulators to take positions on how competition law affects data collection practices – and implicitly, when competition supports good consumer outcomes relating to data, and when it does not”, explains Dnes.

Dnes joined Preiskel in May 2015, having qualified in New York in 2011 and then interned in Linklaters’ Brussels office. His practice is primarily focused on contentious merger clearance cases, alongside contentious litigation. “The most inspiring thing is getting a deal through in those cases where both sides distrust each other – not uncommon as regulators will assume anti-competitive motives in many mergers, just as businesspeople often assume that their deal could not possibly be the one that raises a concern”, he says.

“In practical terms, that means translating geeky competition concepts into terms businesspeople will understand – and getting people to meet in the middle. Counsel can really add value by helping both sides to distinguish genuine concerns from instances of “tunnel vision” and in a phase two merger this must all be done at warp speed, because the deal will fall apart unless that can be done before the interest in, or financing for, the deal falls apart.”

In this case, there was more than just geeky competition concepts the at play, it was a more fundamental principle: “Are large platforms abusing their position in applying one-size-fits-all data collection policies? Is it anti-competitive to prevent rival advertisers from collecting and handling data, in the absence of evidence that consumers are harmed by it?”.

The Google Privacy Sandbox case

Google holds a dominant market position through which it can restrict or distort competition on the open web and discriminate against competitors in favour of its own business. So, this case is of enormous public significance in preventing the erosion of open web freedoms that have driven open democratic business of 30 years since its inception.

“The case was one of the most important I have ever worked on: if the case does not preserve a space for small- to medium-sized business to innovate alongside big tech, those smaller businesses, including the client’s, will close or at least have to pivot to very different projects. This is a heavy responsibility, especially given the technical complexity”, Dnes says.

“I’ve been very fortunate to be involved in this case and the lessons for how dominance law, data, and big tech interact I hope will be very useful in future cases. I also teach at a law school and will incorporate insights from the case into teaching for the next generation of competition lawyers.”

It was anticipated that one line of Google’s likely defence of its browser changes would be that they protect end user privacy. For this reason, it called them the Privacy Sandbox. However, MOW reviewed the privacy position and established before filing its complaint that the argument was unlikely to be a full defence, but that in all events the privacy defence raised the issue that the Competition and Markets Authority (CMA) was not legally competent to decide whether an action is or is not protecting consumer privacy.

In November 2020, following the submission of a formal complaint, Preiskel agreed with the CMA and Information Commissioner’s Office (ICO) that they could consider its submission to be a submission to both authorities to consider the case together. This is the first time this type of approach has been taken and has led to a new joint working protocol between the CMA and the ICO and a joint statement of applicable principles.

Google announced the proposed changes to its browser in January 2019. These were designed to increase customers’ uptake of its advertising products while undermining advertising and publishing competitors’ ability to compete. Google’s announced changes involved discussion with World Wide Web Consortium (W3C) members.

The CMA estimated that up to 70% of publisher’s revenues could be affected by Google’s changes to third party cookies. Adversely affected ad tech and publishing firms needed to delay or prevent those changes from coming into effect, in some cases to prevent the total loss of their business.

The CMA had conducted the Online Platforms and Digital Advertising Market Study (MS) up to July 2020 and identified a series of abuses and adverse effects on competition arising from Google’s actions, including the Privacy Sandbox. The MS followed the Cairncross Review of the impact of digital platforms on freedom of the press and plurality of the media.

Google is dominant in online search, many online advertising markets, and has a significant information asymmetry benefit. It holds most, if not all, relevant and necessary information that is vital to proof of causation of harm in an abuse of dominance claim. Google has in past cases shown that many intervening levels in and across different internet markets and complex supply chains could be alternative causes of harm. Any abuse of dominance claimant against Google thus needs to either obtain disclosure in court or benefit from information gathering powers available to the CMA to prove causation.

The final report in the MS, published 1 July 2020, proposed remedies which require new primary legislation. The CMA made formal recommendations to government to introduce legislation to implement its proposals. Government has agreed in principle, but parliamentary time has yet to be found.

During the summer of 2020 it was known that US federal and state authorities, the Australian Competition & Consumer Commission and Australian Authorities were investigating Google, so Preiskel contacted US authorities, lawyers dealing with potential parallel cases, and the EU Commission.

Given the CMA proposals for primary legislation announced in July 2020, Preiskel created an advocacy program to influence members of key departments, such the Department for Business, Energy and Industrial Strategy and the Department for Digital, Culture, Media and Sport. The international nature of the abuse, parallel concerns being raised in the standards bodies, and investigations in other countries made it necessary to build a team with MOW members with truly international contacts and expertise, supplemented by external public affairs experts.

“The most significant technical sticking point from a legal perspective has been working with a broad coalition of affected parties, who are technically customers to the Movement for an Open Web, and have subtly different experience, views and desires. Managing this broad coalition is mostly a task for the most senior lawyer on the case, but I have learned a lot by observing how the energy and cohesion of a diverse group of clients can be harnessed towards a common goal’, explains Dnes.

Legally, two avenues existed for obtaining interim relief: private action through the courts and competition authority action. Other jurisdictions were considered but the relatively lower applicable threshold in the UK made it an attractive avenue. Also, a little known and unique ground for public interest injunctions is available to the CMA which could protect the plurality of media.

An application for interim measures meant that Google would need to prioritise the case above many others being brought internationally. It also changes the dynamic on document disclosure, ensuring greater interest in Google disposing of the case faster, in producing documents swiftly and in not seeking to delay the procedure.

The application was filed on 23 November 2020 and following submissions, meetings and responses to the CMA, it decided to investigate on 7 January 2021 publishing that decision the following day. This was no small achievement given the very technical nature of the issues involved.

To date, certain elements of the Privacy Sandbox have been delayed or changed indefinitely, particularly Google’s UACH, FLoC, and Fledge proposals. MOW has made 28 submissions to the CMA and relevant UK and non-UK government departments, competition authorities and agencies, achieving extraordinary press coverage of over 4.4 billion total editorial reach.

The CMA and ICO made a joint statement of principles relevant to the case on 19 May 2021, supporting MOW’s case and creating a ground-breaking “blueprint” for future coordination between the authorities.

MOW made the first known formal application for interim measures on both plurality of the media and competition and invasion of privacy basis since recent changes to the law. The plurality of the media is a public interest jurisdiction, valuable for the CMA as it is a broadly-based discretionary jurisdiction that is difficult to appeal. The CMA’s investigation is the first against a “big tech” platform for abuse of dominance in the UK.

It is the first enforcement action taken by the CMA under its new prioritisation principles and reflects government policy that Preiskel believes the case has influenced. This was published in the Penrose Report in February 2021, which endorses the CMA proposals. As it was also the first case worldwide against Google in respect of the Chrome browser changes, it influenced the Texas Attorney General, and 14 other US state attorneys generals, which has since amended the pleadings in Texas vs Google to encompass MOW’s case.

It is also the first CMA investigation after the end of the Brexit transition period. It signals to the world the position the CMA intends to take toward digital platform abuse, to ensure that the world wide web remains open, not enclosed by a small number of players within their walled gardens. It is also the first CMA investigation that covers the boundary between both competition and privacy.

The MOW campaign and case is at the cutting edge of the public policy agenda toward online markets and how they can be policed worldwide. The CMA has since taken cases against Facebook and Apple.

On 11 June 2021, the CMA published a Notice of Intention to Accept Commitments, consulting on proposed commitments under which the CMA would monitor Google’s future conduct regarding the ‘Privacy Sandbox’, representing a potential landmark towards reducing Google’s dominance of the world wide web.

Of course, all of this took place in the context of the pandemic. “In a sense this was no different from earlier practices in deals involving people in many different places but implementing best practices including frequent check ins and less formal aspects like online drinks/catch up sessions have all helped”, Dnes says.

“In the future, I expect we will harness the best bits of remote working – the flexibility, the ability to get clear head space to work on detail when needed – while still getting together regularly for high octane brainstorming and firm events.”