UK Unleashes New Law on Google, Citing “Strategic” Market Power

The UK has unleashed its new digital markets law on Google, with the competition regulator citing the company’s “strategic” market power as the reason for placing it under a tighter regulatory regime. The Competition and Market Authority (CMA) has officially designated Google with “strategic market status” (SMS) for its search and search advertising businesses.
This landmark decision is the first application of powers from the Digital Markets, Competition and Consumers Act 2024. The CMA justified the move by highlighting Google’s control over more than 90% of the UK search market, a position it deems so influential that it requires special oversight to ensure fair competition.
With the SMS designation in place, the CMA can now legally enforce changes to Google’s UK operations. The authority is preparing a consultation on a range of potential interventions, including the introduction of “choice screens” to promote alternative search engines like Perplexity and ChatGPT, and rules to ensure fair search rankings.
Google has expressed concerns that the regulatory action could have a chilling effect on innovation. A company spokesperson warned that some of the proposed measures could slow down the introduction of new products, particularly those based on AI. This contrasts with the view of competition lawyers who believe the UK is right to tackle the market distortions caused by Google’s monopoly.
The CMA has clarified that the designation is a procedural step and not a punishment. It paves the way for a formal process to develop new conduct requirements for Google, which will begin with a consultation this year. The regulator is also separately considering whether to apply the same SMS designation to Apple and Google’s mobile platforms.