UK Invokes New Powers to Curb Google’s Search Dominance

LONDON: In a landmark move under its new digital competition regime, the United Kingdom has designated Google as having Strategic Market Status (SMS) in the online search sector, enabling authorities to introduce “proportionate, targeted” regulations aimed at curbing the dominance of Big Tech.

The announcement by the Competition and Markets Authority (CMA) on Friday marks the first use of Britain’s enhanced regulatory powers to address the market influence of tech giants. While the designation does not imply wrongdoing or bring immediate requirements, it allows the CMA to compel Alphabet-owned Google to alter its business practices if deemed necessary.

“We have found that Google maintains a strategic position in the search and search advertising sector – with more than 90% of searches in the UK taking place on its platform,” said Will Hayter, Executive Director for Digital Markets at the CMA.

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The designation grants the CMA significant enforcement authority, including the ability to impose fines and mandate operational changes. Potential interventions outlined earlier include fairer search result rankings and improved access for consumers to alternative search engines, fostering a more competitive landscape.

This move comes amid mounting global scrutiny of Google’s market dominance. In the United States, the Federal Trade Commission (FTC) recently opened an investigation into Google and Amazon’s advertising practices, while the Department of Justice (DOJ) is seeking to force Google to divest certain ad tech assets.

Reacting to the UK decision, Oliver Bethell, Google’s Senior Director for Competition, warned that some proposed interventions could “inhibit UK innovation and growth,” especially amid a wave of AI-based advancements. He emphasized that Google, which recently pledged a £5 billion ($6.65 billion) investment in the UK, hopes that any regulatory outcomes will align with the interests of British consumers and businesses.

While the CMA’s current designation excludes Google’s Gemini AI assistant, the regulator noted that other AI-powered search features like AI Overviews and AI Mode are included. The CMA said it would continue to monitor the evolving AI search landscape and adjust its regulatory scope accordingly.

The development marks a significant step in the UK’s efforts to rein in the influence of digital giants, positioning itself at the forefront of global tech regulation.