Britain’s Competition and Markets Authority (CMA) has paved the way for tougher regulation of Google’s dominance in online search by officially designating the company with ‘strategic market status’ (SMS). This landmark decision, confirmed after a nine-month investigation, empowers the CMA to impose targeted measures aimed at ensuring fairer competition within the UK's digital markets. With Google handling over 90% of online searches in the UK, the designation acknowledges the company’s substantial market power in both general search and search advertising services.
The CMA’s move is the first under the UK’s new Digital Markets Competition Regime, designed to address concerns around the influence large technology firms wield over digital markets. According to the CMA, this status will allow it to consider interventions such as encouraging alternative search engines through mechanisms like mandatory ‘choice screens’ and enforcing non-discriminatory practices in how search results and advertisements are ranked and presented. The authority also seeks greater transparency and improved data portability to help competitors innovate and provide rival services. A consultation on the specific rules to be applied to Google is planned for later this year, with the CMA expected to adopt the designation officially by October and begin implementing measures from 2026.
Despite these developments, Google has expressed significant reservations about the proposed regulatory framework. The company warns that excessively stringent rules could stifle innovation and growth within the UK’s technology sector, potentially leading to slower launches of new products and higher costs for consumers. Oliver Bethell, Google’s senior director for competition, highlighted the risk that some suggested interventions could inhibit UK innovation, urging the regulator to avoid the pitfalls seen in other jurisdictions such as the European Union’s Digital Markets Act (DMA). Google also emphasised its recent commitment to the UK’s AI ambitions, including a £5-billion investment over two years, suggesting that favourable regulatory conditions have allowed the UK to benefit from early access to cutting-edge products and services.
While Google’s Gemini AI assistant is currently excluded from the designation, the CMA has indicated it will continue monitoring developments in this area. The new regulatory steps focusing specifically on Google’s search services are distinct from the CMA’s ongoing investigation into Google’s mobile platform dominance, which may result in additional designations in the future, including for Apple’s ecosystems.
The CMA’s intervention reflects broader global moves to regulate the major players in digital markets, aiming to foster healthier competition and greater consumer choice. The UK is positioning itself cautiously but proactively, seeking a balance between regulation and innovation. As Sarah Cardell, the CMA’s Chief Executive, stated, the aim is to increase consumer choice and enable a more competitive tech sector in the UK without imposing undue burdens that might hinder growth or technological advancement.
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Source: Noah Wire Services