Google named strategic player in UK, may face stricter rules
What's the story
The UK's Competition and Markets Authority (CMA) has designated Google with a strategic market status (SMS) in the search and search advertising markets. This means that the tech giant holds such a strong and established position that it needs special regulations to ensure fair competition. The designation covers Google's search services, online search advertising services, AI-powered search features like AI Overviews and AI Mode, Discover feed and results, Top Stories, and News tab.
Market analysis
Dominance in search market
The CMA's report emphasized Google's unmatched position in the digital space for a long time. It noted that other traditional general search providers are much smaller than Google and have been for years. Bing, the largest of these providers, has less than 5% share of queries and search advertising. The CMA also observed that no traditional general search providers have grown relative to Google for at least 15 years.
Regulatory implications
Potential changes in operations
While the designation doesn't imply wrongdoing by Google or impose immediate obligations, it does open the door for further assessments and interventions. These could potentially change how Google operates its search services in the UK. The CMA said it would launch a consultation on possible interventions later this year, following a nine-month investigation into whether Google enables weak competition and barriers to entry/innovation in search.
Possible actions
Possible enforcement actions by CMA
The CMA's potential enforcement actions include giving UK residents the option to choose and switch search engines via choice screens, implementing data portability systems, ensuring fair ranking of search results, proper attribution of publishers' work in searches, and consent mechanisms for Google's AI services. However, it should be noted that these are just possibilities and not confirmed actions at this stage.
Company response
Google warns against interventions
In response to the CMA's designation, Google said any interventions would hurt innovation in the UK. The company stressed that the UK gets access to new products and services before other countries because it has avoided costly restrictions on popular services like Search. Google warned that many proposed interventions could stifle UK innovation and growth, possibly delaying product launches during a time of profound AI-based innovation.