The Competition and Markets Authority (CMA) is trying to figure out if Google qualifies as having “strategic market status” (SMS) under the U.K.'s Digital Markets, Competition and Consumers Act (DMCC), which came into play on January 1.
This act aims to curb anti-competitive practices in the digital space. If a company is labeled as having “SMS,” the regulator can enforce changes to stop any unfair competition.
Sarah Cardell, the CMA’s chief, mentioned that they’re looking into Google’s stronghold on the search market to ensure everyone has a fair shot, especially with the way AI is changing online searches.
“It’s our job to ensure people get the full benefit of choice and innovation in search services and get a fair deal — for example in how their data is collected and stored,” Cardell said.
“And for businesses, whether you are a rival search engine, an advertiser or a news organisation, we want to ensure there is a level playing field for all businesses, large and small, to succeed,” she added.
The CMA's action comes after the U.S. Department of Justice pushed for Google to sell off its Chrome browser. The DOJ is looking to break up the tech giant, claiming it has a monopoly in the search market.
On Tuesday, the regulator pointed out Google's stronghold in the U.K. search market as a major issue.
According to the CMA, Google dominates over 90% of general search queries in the U.K., with more than 200,000 advertisers relying on its search advertising tools.
The CMA emphasized that search is essential for economic growth, noting that it plays a crucial role in linking businesses with other companies, investors, and customers, making effective competition vital.
“Google Search supports millions of U.K. businesses to grow by reaching customers in innovative ways. The CMA’s announcement today recognises that,” a Google spokesperson told CNBC via email.
“We will continue to engage constructively with the CMA to ensure that new rules benefit all types of websites, and still allow people in the U.K. to benefit from helpful and cutting edge services,” the Google spokesperson added.
In a blog post released later on Tuesday, Google emphasized the need for a “pro-innovation, evidence-based approach” in the U.K. They warned that “overly strict digital competition regulations could limit choices and opportunities for both consumers and businesses.”
We're committed to pushing for new regulations that support all businesses and allow people in the UK to enjoy advanced, useful services.
The CMA pointed out that healthy competition in search is crucial for ensuring that news publishers are treated fairly when their content is used.
With new AI-driven search technologies like OpenAI and Perplexity coming onto the scene, the CMA expressed concerns that Google’s market dominance might hinder the growth of fresh and innovative competitors.