Competition Authority Proposes “Strategic Market Status” to Increase Competition and Transparency

The UK’s Competition and Markets Authority (CMA) is considering a new market designation for Google that would require the search giant to provide alternative search options to users, rank search results more fairly, and offer greater control to publishers over how their content is used in search and AI Overviews.

Under the proposed “strategic market status,” Google would be forced to adhere to a set of measures designed to increase competition and transparency. This would include the implementation of choice screens, allowing users to decide and switch between search services, including AI Assistants. Google would also be required to adopt fair ranking principles for search results and provide better controls for publishers over how their content is collected and used in Google’s AI services, including AI Overviews and Gemini AI Assistant.

The CMA’s proposal is part of the new Digital Markets Competition Regime, which went into effect earlier this year. The authority is currently collecting opinions from industry stakeholders on the proposed designation and will make a decision by October 13.

The CMA’s chief executive, Sarah Cardell, noted that UK businesses spent more than £33,000 per advertiser on Google search ads last year, with Google search accounting for more than 90% of all general search queries in the UK. “If competition was working well, we would expect these costs to be lower,” Cardell wrote in a blog post about the consultation and proposed designation.

Cardell emphasized that the proposed measures aim to give UK businesses and consumers more choice and control over how they interact with Google’s search services, as well as unlocking greater opportunities for innovation across the UK tech sector and broader economy. “These targeted and proportionate actions would give UK businesses and consumers more choice and control over how they interact with Google’s search services — as well as unlocking greater opportunities for innovation across the UK tech sector and broader economy,” Cardell said in a separate statement.

Google search is the most widely used search engine in the UK, with over 90% market share. The search engine processes over 40,000 search queries every second, and its algorithms are constantly evolving to provide the most relevant results to users. However, critics argue that Google’s dominance in the search market has led to a lack of competition and innovation, with many smaller search engines struggling to compete.

The proposed measures could have a significant impact on Google’s business model, which relies heavily on advertising revenue. Google’s search ads generate billions of dollars in revenue each year, and the proposed measures could lead to a shift in how advertisers interact with the search engine.

Some of the specific changes that Google could face under the proposed “strategic market status” include:

• Alternative search options: Google would be required to provide users with alternative search options, including AI Assistants, to increase competition and choice.
• Fair ranking principles: Google would be required to adopt fair ranking principles for search results, which could lead to changes in how search results are displayed and prioritized.
• Better controls for publishers: Google would be required to provide better controls for publishers over how their content is collected and used in Google’s AI services, including AI Overviews and Gemini AI Assistant.
• Data portability: Google would be required to ensure that users can easily transfer their data, including search history, between different search services.

The move is seen as a significant development in the ongoing debate over Google’s dominance in the search market. The proposed measures could have far-reaching implications for the tech industry, and it remains to be seen how Google will respond to the CMA’s proposal.