UK Imposes Special Market Status on Google Search - New Regulations

Google Receives Special Regulatory Status in the UK

The Competition and Markets Authority (CMA) in the United Kingdom has assigned a unique status to Google concerning the online search market. This designation empowers the regulator to implement more stringent rules and oversight.

Strategic Market Status Explained

Google has been identified as possessing “strategic market status” within both the search and search advertising sectors. This signifies that the company maintains a position of considerable strength and longevity, necessitating specific regulations to guarantee equitable competition.

The CMA’s report highlights Google’s sustained dominance. For a prolonged period, Google has held an unmatched position in digital search. Alternative general search providers remain substantially smaller and have consistently trailed Google for over fifteen years.

Implications of the Designation

While this designation doesn't indicate any current findings of misconduct, nor does it impose immediate obligations, it paves the way for further evaluations and potential interventions. These interventions could alter the operational methods of Google’s search services within the UK.

The scope of this designation encompasses Google’s core search functionalities and online search advertising. It also includes AI-powered features like AI Overviews and AI Mode, alongside platforms such as the “Discover” feed, “Top Stories,” and the News tab.

Notably, the Google News application and website are excluded from this designation. Search syndication services also fall outside its purview.

Future Considerations Regarding AI

The CMA acknowledges that Google’s Gemini AI assistant is currently not included within the designation. However, the regulator will reassess this scope as the AI search landscape continues to evolve and become less certain.

A consultation period regarding potential interventions is scheduled to commence later this year.

Investigation Background

This action follows a nine-month investigation initiated earlier in the year. The investigation was prompted by the implementation of the UK’s new digital markets competition regime in January. The CMA aimed to determine if Google hinders competition and creates “barriers to entry and innovation in search.”

Specifically, the CMA investigated whether Google prioritizes its own services over those of third-party providers and if it utilizes consumer data without obtaining explicit consent.

Potential Enforcement Actions

The CMA is considering a range of enforcement measures, which may include:

• Implementing choice screens allowing UK users to select and switch search engines.
• Establishing data portability systems.
• Ensuring fair ranking of search results.
• Guaranteeing appropriate attribution for publishers’ content in search.
• Enabling consent mechanisms for Google’s AI services.

Google’s Response

Google contends that any interventions resulting from this designation could stifle innovation within the UK. The company asserts that the UK currently benefits from early access to the latest products and services due to its avoidance of restrictive regulations.

Maintaining this advantage, according to Google, requires avoiding overly burdensome regulations and learning from the adverse outcomes observed in other regions, which have reportedly resulted in losses of approximately €114 billion for businesses.

Google further argues that many proposed interventions could impede UK innovation and growth, potentially delaying product launches during a period of significant AI-driven advancements. The company also suggests that some measures could directly harm businesses, potentially leading to increased prices for consumers.