This is absolutely the big problem. Google already has a near monopoly on internet advertising, with Facebook/Meta being their only real competitor. If Google has full control over the interest tracking/targeting technology and it’s inescapable because it’s part of the browser engine then they are effectively the gatekeepers of all internet advertising. Meta could still operate as an advertising agency but wouldn’t be able to implement any of their own technology, they’d have to just use what Google allows them to.
Definitely bad, but is it worse than tracking pixels (which came out of Facebook Beacon)? From an end-user privacy sense, I think Topics might be better as it doesn’t keep track of your specific web activity, only general interest categories for the websites that you visit within a period of three weeks - and the record is kept locally in your browser, not on a corporate server.
It’s not part of the browser engine. It’s part of the browser “chrome” (part of its namesake), the thing around the browser engine. So this isn’t in Edge and goes without saying, it isn’t in Firefox etc.
It’s still bad. Chrome is still a popular browser.
Edit: it does keep track of your browser activity, just doesn’t share the whole bunch of data with their parties.