UK Regulator Grants Google “Strategic Market Status”
The UK’s Competition and Markets Authority (CMA) has officially designated Google with strategic market status under the country’s new digital markets competition regime. This designation, which took effect on January 1, 2025, gives the regulator enhanced powers to monitor and potentially intervene in Google’s search and search advertising operations.
What Strategic Market Status Means
The CMA found that Google holds “substantial and entrenched market power and a position of strategic significance” in general search and search advertising services. According to 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% of searches in the UK taking place on its platform.”
This designation doesn’t automatically imply wrongdoing by Google, but it does enable the CMA to implement interventions aimed at ensuring search services remain “open to effective competition” and that businesses relying on Google are treated fairly. The status applies to Google’s AI Overviews and AI Mode features, though notably excludes the Gemini AI assistant for now.
Potential Regulatory Changes Ahead
Google now faces the prospect of new rules and regulations governing how its Search function operates in the UK market. The CMA launched its investigation into Google’s search industry standing on January 14 to confirm this designation and expects to begin consulting on potential interventions later this year.
In response to the designation, Google has expressed concerns about potential regulatory impacts. The company stated that “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.” Google believes some proposed measures could “pose direct harm to businesses” and potentially lead to higher consumer prices.
Broader Implications for Digital Markets
The new digital markets competition regime aims to “promote competition in fast-moving digital markets, while protecting UK consumers and businesses from unfair or harmful practices by the very largest technology firms.” Google has pointed to the European Union’s similar Digital Markets Act, which designated the company as a gatekeeper in 2023, as an example of regulations that have reportedly cost businesses an estimated €114 billion.
As this regulatory landscape evolves, the original reporting on this development provides valuable context for understanding the potential implications for both technology companies and UK consumers. The outcome of these regulatory discussions could significantly shape how dominant digital platforms operate in the UK market moving forward.
