Google’s operations in the United Kingdom are facing a potential overhaul after the Competition and Market Authority (CMA) officially designated the company as having “strategic market status” in the search sector. This is the first time the regulator has used this power from a new digital markets law, enabling it to enforce changes on how the tech firm conducts its business.
The “strategic market status” (SMS) designation is applied to companies with such significant and entrenched market power that a special regulatory approach is deemed necessary. With Google handling more than 90% of all UK internet searches, the CMA concluded that it comfortably meets this criterion. The status gives the watchdog the authority to design and impose remedies to open up the market.
The CMA has already floated several possible interventions it will consider during a consultation period later this year. These include requiring Google to offer users a “choice screen” to select from a list of search providers, which could feature AI-first rivals like ChatGPT. Furthermore, the regulator may enforce rules on fair ranking practices and provide publishers with more control over the use of their content in AI-generated search results.
The decision has elicited a mixed response. Google’s senior director for competition, Oliver Bethell, warned that such measures could endanger UK users’ access to new products by stifling innovation. On the other hand, competition lawyer Tom Smith, a former CMA legal director, asserted that there is a strong case for the UK to follow the US and EU in removing “market distortions caused by Google’s monopoly position.”
This ruling is a major milestone in the UK’s efforts to regulate Big Tech under the Digital Markets, Competition and Consumers Act 2024. The CMA emphasized that the designation itself isn’t a finding of wrongdoing but a necessary step before it can consult on and implement pro-competitive measures. The authority is also conducting a similar SMS assessment of Apple and Google’s mobile platforms.