[jesstaa]

Sure they can. They just have to do it in a way that doesn't create a disadvantage for other advertising providers.

Google isn't allowed to stop others tracking you without also removing their own ability to track you because that's anti-competitive.

[JoshTriplett]

You are assuming reasonableness on behalf of the regulators in question. In an ideal world, they hopefully said "you cannot give information to your own advertising/analytics division that you don't give to others". However, they could just as easily have said "you must provide either third-party cookies or a replacement for them", without offering the much more reasonable alternative of turning both off and not giving Google advertising/analytics any information either.

So, what did the regulators actually say, and does it in fact allow Google to turn off third-party cookies without any replacement? If it does, then this is Google's fault for adding this feature in Chrome. If it doesn't, then this is the fault of bad regulation.