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The UK's competition watchdog has officially slapped Google with "strategic market status," a new legal label that gives the regulator far-reaching powers to rein in how the search giant runs its empire.
The Competition and Markets Authority (CMA) said on Friday that Google meets the legal threshold for "strategic market status" under the UK's new Digital Markets Act, giving it sweeping oversight of its search and advertising business. The move doesn't accuse Google of wrongdoing, but it does formally recognize that the firm holds "substantial and entrenched market power" and occupies a "position of strategic significance" in the digital economy.
The designation, which covers Google Search and associated products such as Top Stories, Discover, and News tabs, as well as newer AI features like Overviews and AI Mode, means the CMA can now impose conduct requirements designed to keep the market open to competition.
Google's Gemini AI assistant is excluded for now, though the regulator hinted that could all change if the technology becomes more tightly integrated with search.
"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," said Will Hayter, executive director for Digital Markets at the CMA. "We have found that Google maintains a strategic position in the search and search advertising sector – with more than 90 percent of searches in the UK taking place on its platform."
Google, meanwhile, is already signaling concern about the regulator's newfound muscle.
"Google Search contributes billions of pounds a year to the UK economy – £118 billion in 2023 alone," said Oliver Bethell, senior director of Competition at Google.
"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."
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The CMA's latest move comes after the watchdog designated Apple and Google with strategic market status in mobile platforms, and it's likely to set a precedent for future designations under the UK's post-Brexit digital rulebook. The watchdog says the new regime is designed to prevent dominant platforms from abusing their position before harms occur, a shift from the old model of investigating breaches after the fact.
In practice, the new powers could see the CMA demand changes in how Google ranks results, displays ads, or handles data that might give its own services an advantage. It could also mandate transparency measures or interoperability requirements to ensure rivals can plug into Google's ecosystem on fairer terms.
Google's dominance in search may be unchallenged, but the CMA has just given itself the legal crowbar to start prying it open. ®
