UK slaps Google Search with special market status, making way for stricter regulations

The United Kingdom’s Competition and Markets Authority (CMA) on Friday designated Google with a special status in the market for online search that would enable the regulator to enforce stricter regulations.

The CMA has designated Google as having “strategic market status” in the search and search advertising markets, which means the company has such “a substantial and entrenched” position that it requires special regulations to ensure fair competition.

“Google has had an unparalleled position in this digital activity for an extended period. Other traditional general search providers are significantly smaller than Google and have been for many years. Bing is the largest of these providers, but its current shares of queries and search advertising are both less than 5%. No traditional general search providers have materially grown relative to Google for at least fifteen years,” the CMA wrote in a report.

Although the designation does not mean that the CMA has found evidence of wrongdoing and does not introduce any immediate requirements, it does open the gates to launch further assessments and introduce interventions to change how Google runs its search services in the country, the CMA said.

The designation covers Google’s search and online search advertising services; its AI-enabled search features like AI Overviews and AI Mode; and the ‘Discover’ feed and results, as well as the “Top Stories” and News tab. It does not cover the Google News app and website, and search syndication services are also out of scope.

The CMA, however, noted that while Google’s Gemini AI assistant isn’t covered by the designation at the moment, it will review the scope of the designation given uncertainty over how the AI search market is evolving.

The regulator said it would launch a consultation on possible interventions later this year.

The move follows a nine-month investigation into the company launched earlier this year after the U.K.’s new digital markets competition regime came into force in January. The CMA was looking to prove if Google is enabling weak competition and “barriers to entry and innovation in search”; whether the company prefers its own services over those offered by third parties; and if it uses consumer data without their explicit consent.

The CMA’s roadmap of possible enforcement actions may include: enabling U.K. residents to choose and switch search engines via choice screens; implementing data portability systems; enforcing fair ranking of search results; ensuring proper attribution of publishers’ work in search; and enabling consent mechanisms for Google’s AI services.

Google, for its part, says that any interventions following the designation would harm innovation in the U.K. “The UK enjoys access to the latest products and services before other countries because it has so far avoided costly restrictions on popular services, such as Search. Retaining this position means avoiding unduly onerous regulations and learning from the negative results seen in other jurisdictions, which have cost businesses an estimated €114 billion,” the company wrote in a blog post.

“Many of the ideas for interventions that have been raised in this process would inhibit UK innovation and growth, potentially slowing product launches at a time of profound AI-based innovation. Others pose direct harm to businesses, with some warning that they may be forced to raise prices for customers,” it added.