The U.K.’s competition watchdog has given Google LLC a new regulatory designation that could expose it to additional antitrust scrutiny.
The Competition and Markets Authority, or CMA, gave the company strategic market status in a notice published today. The designation applies to Google’s general search and search advertising businesses.
Today’s decision traces back to an antitrust probe the CMA opened in 2022. Last year, officials closed the probe to launch a new investigation under the U.K.’s DMCC Act, a recently enacted law designed to regulate the tech industry. The legislation enhanced the CMA’s ability to address antitrust issues in digital markets.
A company must meet two criteria to receive strategic market status. First, it must have annual revenues of more than £1 billion in the U.K. or more than £25 billion worldwide. Additionally, regulators have to determine that the company has a “substantial and entrenched market power in a digital activity.” If a tech firm that meets those criteria breaches antitrust rules, the CMA can order it to change its business practices or pay a fine.
The watchdog tentatively found that Google has strategic market status four months before today’s move to finalize the decision. When the initial determination was made, officials published a list of business changes that Google may be required to implement.
The CMA could order the company to provide choice screens that make it easier for users to switch between search services. Additionally, Google may be required to roll out new data portability features. The CMA could also instruct the company to give publishers more control over how their content is used in AI Overviews.
In today’s decision, the regulator stated that the requirements associated with Google’s strategic market status extend to AI Overviews and AI Mode. The latter feature enables Google Search to generate more detailed prompt responses. Gemini isn’t affected by the new regulatory designation for the time being, but the CMA has indicated that the AI assistant’s antitrust status could change in the future.
“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,” said Will Hayter, the CMA’s executive director for digital markets.”
Oliver Bethell, Google’s senior director of competition, wrote in a blog post today “the U.K. enjoys access to the latest products and services before other countries because it has so far avoided costly restrictions on popular services, such as Search. Retaining this position means avoiding unduly onerous regulations.”
Google is the first tech firm to have received strategic market status under the DMCC Act. The next company may be Apple Inc., which is currently the focus of an competition investigation by the CMA. Earlier this year, the regulator tentatively found that the iPhone maker should be given strategic market status in the mobile operating system segment.
Image: Google
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