Google’s staggering 90% market share in the UK search sector has officially triggered a tough new regulatory status that could force the company to change its business practices. The Competition and Market Authority (CMA) has designated the tech giant with “strategic market status” (SMS), a first-of-its-kind move that brings Google under a special, more stringent oversight regime.
This action is powered by the UK’s new Digital Markets, Competition and Consumers Act 2024. The SMS designation is specifically designed for firms whose market power is so entrenched that it requires proactive regulation to ensure fairness. Will Hayter of the CMA stated that Google’s strategic position in search and search advertising warrants this step.
The practical implications of this designation will be determined following a consultation later this year. However, the CMA has already signaled its direction of travel. Potential requirements include the introduction of “choice screens” to promote rival search engines, including emerging AI services like Perplexity. The regulator is also focused on ensuring unbiased search rankings and giving publishers greater control over their content.
Google has responded with a warning that the CMA’s approach could stifle the very innovation it seeks to promote. A company representative argued that some of the proposed interventions could slow down the launch of new products in the UK, particularly in the critical area of AI. This view is contrasted by legal experts who argue the UK is now simply aligning with actions already underway in the US and EU.
The designation itself does not imply wrongdoing or immediate fines. Instead, it empowers the CMA to begin the process of drafting and implementing new “conduct requirements” for Google. The tech industry will be watching closely as this process unfolds and as the CMA continues its parallel assessment of the market power of Apple and Google’s mobile platforms.
