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Google It may be forced to make changes to the way its search engine operates in the UK after it was granted so-called strategic market status by the competition watchdog for its “substantial and strong market power” in the sector.
The Competition and Markets Authority (CMA) confirmed that legal tests have been completed to grant Google status in general search and search advertising services.
This move marks the first time CMA New powers have been used to grant the status to a tech firm to tackle the dominance of IT giants, meaning it can impose measures if needed.
Under new digital markets rules that recently came into force, conduct requirements can be imposed on designated firms with status that promote competition for UK businesses and choice for consumers.
Google is responsible for over 90% of searches in the UK, while also being used by over 200,000 UK businesses to reach customers.
In June, the CMA said it was considering whether it needed to loosen Google’s control over its search engine and allow publishers to have greater influence over how their content is used.
The potential changes could force regulators to force Google to give internet users the option to use alternative search engines.
But the CMA confirmed on Friday that this condition will not apply to Google’s Gemini AI Assistant, although other AI-based search features are included, such as AI Mode and AI Overview.
Designating a firm with this status “does not constitute a finding of wrongdoing and does not present any urgent requirements”, the CMA said.
But it said it would consider “proportionate, targeted interventions”, with the CMA set to launch a consultation on possible measures at the end of the year.
Will Hayter, executive director of digital markets at the CMA, said: “By promoting competition in digital markets like search and search advertising we can unlock opportunities for businesses big and small to support innovation and growth, driving investment into the UK economy.
“We found that Google maintains a strategic position in the search and search advertising sector – more than 90% of searches in the UK occur on its platform.”
Alphabet-owned Google warned over the impact on growth and innovation from potential price increases and potential “interference” from the CMA.
Oliver Bethell, senior director of competition at Google, said: “Many of the intervention ideas raised in this process will hinder UK innovation and growth, potentially slowing product launches at a time of intense AI-based innovation.
“Others see direct harm to businesses, with some warning that they could be forced to raise prices for customers.”
Which consumer group? The move was praised as “an important step towards improving competition in digital markets”.
Rocio Concha, which one? The policy and advocacy director said: “The CMA’s careful evidence gathering makes a compelling argument that Google meets the criteria for a strategic market position for Google Search.
“Online search is evolving as GenAI tools become more widely used, but the CMA must still act to tackle Google’s harmful dominance and promote competition among GenAI search tools.”