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.”
