The UK’s digital market is poised for a shake-up as regulators have taken a step that could level the playing field for Google’s search competitors. By designating Google with “strategic market status,” the Competition and Market Authority (CMA) has acquired the power to enforce changes aimed at breaking down the barriers to entry in the lucrative search market.
This “strategic market status” (SMS) is a new tool in the CMA’s arsenal, granted by the Digital Markets, Competition and Consumers Act 2024. It is reserved for firms with such significant market power that they require special oversight. With Google’s share of UK searches exceeding 90%, the regulator deemed the designation necessary to foster a healthier competitive environment.
The potential ramifications for the search market are substantial. The CMA is considering forcing Google to display “choice screens” that would allow users to easily select other search engines, explicitly noting that AI challengers like Perplexity should be among the options. Furthermore, the regulator is looking at rules to ensure search result rankings are fair and that publishers have more say over their content.
Google has expressed reservations, with a spokesperson suggesting the proposed measures could stifle innovation and slow the introduction of new services for UK consumers. This perspective is not universally shared; competition lawyers argue that the move empowers the UK to align with global efforts in the US and EU to correct the anti-competitive effects of Google’s market position.
The CMA has emphasized that the designation is a procedural step, not a punitive one. It enables a formal consultation process, set to begin this year, to determine what new obligations Google will face. The decision is a clear signal of the UK’s more assertive regulatory stance, with the mobile platforms of Apple and Google also under scrutiny for a potential SMS designation.
