Britain has officially designated Google as having strategic market status (SMS) in the online search sector — marking the first use of the country’s new regulatory powers designed to rein in Big Tech dominance.
The Competition and Markets Authority (CMA) announced the designation on Friday, granting it the authority to enforce “proportionate and targeted” interventions to promote competition in the digital market. The CMA emphasized that this move does not represent a finding of wrongdoing but opens the door to potential operational changes for Google in the UK.
“We have found that Google maintains a strategic position in the search and search advertising sector — with more than 90% of searches in the UK taking place on its platform,” said Will Hayter, CMA’s Executive Director for Digital Markets.
The designation allows the CMA to compel Google, owned by Alphabet Inc., to modify business practices that could stifle competition. It also empowers the regulator to impose fines for non-compliance and directly enforce new requirements when necessary.
This development comes amid increasing global scrutiny of Google’s market power. The US Federal Trade Commission (FTC) recently launched a probe into Google and Amazon’s advertising operations, while the US Department of Justice (DoJ) seeks to force Google to divest key advertising technology tools.
In response, Google’s Senior Director for Competition Oliver Bethell expressed concerns that regulatory interventions could hinder innovation.
“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,” Bethell said.
Despite the regulatory pressure, Google remains committed to its UK operations, highlighting its £5 billion ($6.65 billion) investment plan announced last month. The company expressed hope that the CMA’s actions would align with its mission to support UK consumers and businesses.
The CMA’s scope includes Google’s AI-based search features, such as AI Overviews and AI Mode, though its Gemini AI assistant remains outside the current designation. However, the regulator indicated that this position would be reviewed as AI integration in search evolves.
This landmark ruling could set a precedent for how Britain — and potentially other jurisdictions — regulates digital giants, ensuring fairer ranking systems, user choice, and healthier market competition in online search.
