UK CMA Designates Google Search with Strategic Market Status

After a months-long investigation, regulators at the UK Competition and Markets Authority (CMA) have determined that Google’s Search and search advertising services have Strategic Market Status (SMS), meaning they have “substantial and entrenched market power” with “a position of strategic significance” and are thus subject to more stringent competition rules. In other words, they are monopolies.

“The CMA launched an investigation into Google’s general search and search advertising services on 14 January and consulted on its proposed decision in June that Google should be designated with strategic market status,” the CMA announcement explains. “Since this proposed decision, the CMA has confirmed that Google has substantial and entrenched market power in general search and search advertising and has been designated with strategic market status.”

This determination should come as no surprise given the dominance of Google Search and the similar regulatory attention the online giant is getting worldwide because of that. Though the CMA didn’t accuse Google of “wrongdoing,” there are questions about what happens next because the SMS designation means the CMA can require Google to change its services to improve competition.

Google struck a familiar tone in a statement about the CMA designation.

“We will likely face new rules and regulations on how Search works,” Google confirmed. “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. Others pose direct harm to businesses, with some warning that they may be forced to raise prices for customers.”

But Google also issued a bit of a threat to the CMA.

“To date, UK businesses and consumers have been among the first to benefit from Google’s innovations, often months before their European counterparts,” the Google statement notes. “The UK 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 and learning from the negative results seen in other jurisdictions, which have cost businesses an estimated €114 billion.”