Project NERA: State Attorneys General claim Google is planning to turn the internet into a "walled garden"

We have long suspected that Google’s Privacy Sandbox plans were more about enriching the company than improving the privacy of internet users.

Now 27 state attorneys have asserted the same in much more detail, claiming a vast conspiracy by Google to close off the internet and centralize all advertising under their umbrella.

Project NERA was Google’s original plan to create a closed ecosystem out of the open internet. Google documents reveal that Google’s motive was to “successfully mimic a walled garden across the open web [so] we can protect our margins.”

According to Google’s internal documents, the strategy would allow Google to extract even higher intermediation fees. A Google employee aptly described Google’s ambition for Project NERA to “capture the benefits of tightly ‘operating’ a property … without ‘owning’ the property and facing the challenges of building new consumer products.”

This is similar to how Apple is able to extract massive profits from developers on the iPhone without creating the apps, while Microsoft is unable to do this on the open platform that is Windows.

Google main strategy to do this was to leverage its popular browser, Chrome, to track users, by forcing them to stay logged into the browser. Google did this by logging users into the browser when they logged into any Google property such as Gmail or YouTube, and logging them out of services when they logged out of the browser. This dark pattern funnelled users into staying logged into the browser and allowed Google to track users both on and off Google properties.

Google was then able to collect detailed data on users without the use of cookies, and sell ads against these profiles.

The Attorneys General notes that as regulatory scrutiny around Google and other Big Tech firms increased globally, Google transitioned from Project NERA to “Privacy Sandbox,” an ostensibly open standard which would still largely depend on the browser to do the tracking.  This would also accelerate the preeminence of Google’s ad network by blocking 3rd party cookies used by other ad agencies.

The Attorneys general note:

Google’s new scheme is anticompetitive because it coerces advertisers to shift spend from smaller media properties like The Dallas Morning News to large dominant properties like Google’s. Chrome is set to disable the primary cookie-tracking technology almost all non-Google publishers currently use to track users and target ads. A small advertiser like a local car dealership will no longer be able to use cookies to advertise across The Dallas Morning News and The Austin Chronicle. But the same advertiser will be able to continue tracking and targeting ads across Google Search, YouTube, and Gmail—amongst the largest sites in the world—because Google relies on a different type of cookie (which Chrome will not block) and alternative tracking technologies to offer such cross-site tracking to advertisers. By blocking the type of cookies publishers like The Dallas Morning News currently use to sell ads, but not blocking the other technologies that Google relies on for cross-site tracking, Google’s plan will pressure advertisers to shift to Google money otherwise spent on smaller publishers.

They note “Google operates on the buy-side and the sell-side, runs an exchange, and participates in the market as a buyer and as a seller,” and continue by saying “Google’s upcoming changes will force market participants to rely even more on Google, a conflicted intermediary, as the arbiter of ad transactions.”

They accuse Google of “trying to hide its true intentions behind a pretext of privacy,” saying:

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 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. In fact, the new Google Chrome tracking groups create something akin to a Google social credit score based on group identity. As The Electronic Frontier Foundation recently summarized: “Today, trackers follow you around the web, skulking in the digital shadows in order to guess at what kind of person you might be. In Google’s future, they will sit back, relax and let your browser do the work for them. …. The Sandbox isn’t about your privacy. It’s about Google’s bottom line.

At the end of the day, Google is an advertising company that happens to make a browser.”

The accusations have of course not been proven in court yet, but on the face of it, it appears very clear that an advertising company should not be determining how we are being tracked.

The full 173-page antitrust filing can be read here.