The UK’s competition regulator has designated Google with a special “strategic market status,” a move that grants the watchdog significant power to enforce changes in the tech giant’s search and search advertising operations. This landmark decision marks the first time the Competition and Market Authority (CMA) has used its new authority under recently enacted digital laws, placing Google under a much tighter regulatory microscope.
The “strategic market status” (SMS) designation is not an accusation of wrongdoing but a recognition of Google’s immense market power. The CMA highlighted that with over 90% of UK searches conducted on its platform, Google holds a strategic position that warrants a bespoke regulatory regime. This status empowers the regulator to proactively address potential market imbalances and promote fairer competition.
Among the potential changes being considered is the introduction of “choice screens,” which would give UK users the option to select a different search service when setting up their devices. The CMA has suggested these screens could feature innovative AI-powered alternatives like Perplexity and ChatGPT. Other proposals include ensuring unbiased ranking of search results and giving publishers more control over how their content is displayed, particularly in AI-generated summaries.
Reactions to the decision have been varied. The CMA asserts that fostering competition in the search market could unlock significant economic benefits and drive investment across the UK. Conversely, Google has expressed concerns, with a spokesperson warning that some proposed interventions could hinder innovation and delay the launch of new products and AI-driven services for UK consumers.
This move is the first significant action taken under the UK’s Digital Markets, Competition and Consumers Act 2024. The CMA has made it clear that while no immediate action will be taken, a consultation on potential conduct requirements for Google will commence this year. In a related development, the regulator is also currently assessing whether Apple and Google’s mobile ecosystems should receive the same SMS designation.