In a direct challenge to Google’s market power, the UK’s competition regulator has designated the company with “strategic market status,” paving the way for a potential shake-up of the country’s search market. This is the first time the Competition and Market Authority (CMA) has used its new powers under the Digital Markets, Competition and Consumers Act 2024, placing Google under a stringent new regulatory regime.
The designation recognizes Google’s formidable position in the UK, where it controls over 90% of the search and search advertising market. According to the CMA, this level of dominance justifies the application of special rules to ensure the market remains competitive and innovative. The status gives the CMA the authority to order specific changes to Google’s business practices.
The regulator is now preparing a consultation on a raft of potential interventions. These include proposals for a “choice screen,” giving users a clear and easy option to select alternative search providers, with the CMA suggesting that AI-native services like Perplexity could be included. Other possible measures aim to enforce fair ranking of results and grant publishers more control over their content, including its use in AI-generated answers.
Google’s reaction suggests a potential clash ahead, with the company warning that the proposed changes could harm innovation and slow the launch of new services in the UK. This contrasts with the view of Will Hayter, the CMA’s executive director for digital markets, who believes promoting competition will unlock opportunities for UK businesses. Legal experts have also supported the move, noting the UK is now empowered to address issues already being tackled by regulators in the US and EU.
While the designation itself does not constitute a penalty, it marks a critical turning point. The forthcoming consultation will determine the specific “conduct requirements” that Google will have to follow. The CMA’s actions are being closely watched as it continues a parallel investigation into the market status of Apple and Google’s mobile phone platforms.