Google may be forced to loosen control of search engine in UK

Google may be forced to make changes to the way its search engine operates in the UK after being handed so-called strategic market status by the competition watchdog for its “substantial and entrenched market power” in the sector.

The Competition and Markets Authority (CMA) confirmed the legal tests were met to designate Google with the status in general search and search advertising services.

The move marks the first time the CMA has used new powers to designate a tech firm with the status as it looks to tackle the dominance of IT giants, which means it can enforce measures if needed.

Under new digital market rules which recently came into force, firms designated with the status can have conduct requirements imposed on them which boost competition for UK businesses and choice for consumers.

Google accounts for more than 90% of searches in the UK, while it is also used by more than 200,000 UK businesses to reach customers.

In June, the CMA said it was looking at whether it needed to loosen Google’s control of its search engine and allow publishers more influence over how their content was used.

Potential changes could see the regulator force Google to give internet users the option to use an alternative search engine.

But the CMA confirmed on Friday that that status would not apply to Google’s Gemini AI assistant, although other AI-based search features are included, such as AI Mode and AI Overviews.

Designating a firm with the status is “not a finding of wrongdoing and does not introduce any immediate requirements”, the CMA said.

But it said it would consider “proportionate, targeted interventions”, with the CMA set to start consulting on possible measures later in the year.

Will Hayter, executive director for digital markets at the CMA, said: “By promoting competition in digital markets like search and search advertising we can unlock opportunities for businesses big and small to support innovation and growth, driving investment across the UK economy.

“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.”

Alphabet-owned Google warned over possible price rises and an impact on growth and innovation from potential “interventions” from the CMA.

Oliver Bethell, senior director for competition at Google, said: “Many of the ideas for interventions that have been raised in this process would inhibit UK innovation and growth, potentially slowing product launches at a time of profound AI-based innovation.

“Others pose direct harm to businesses, with some warning that they may be forced to raise prices for customers.”

Consumer group Which? cheered the move as an “important step to improving competition in digital markets”.

Rocio Concha, Which? director of policy and advocacy, said: “The CMA’s careful evidence gathering makes a compelling argument that Google meets the criteria for strategic market status for Google Search.

“Online search is evolving as GenAI tools become more widely used, but the CMA must still act to tackle the harmful dominance Google has now and to promote competition between GenAI search tools.”