The UK’s Competition and Markets Authority (CMA) announced on Tuesday that it will use newly acquired regulatory powers to investigate Google’s search services. The investigation will examine how these services affect consumers, businesses, advertisers, and competitors, following growing U.S. calls for regulatory action against the tech giant.
The CMA emphasized that search is crucial for economic growth, with millions of consumers and over 200,000 UK businesses relying on Google’s search and advertising services. Google dominates the search market with 90% of searches in the UK taking place on its platform. The CMA’s role, according to its CEO Sarah Cardell, is to ensure fair competition in the sector, allowing consumers to fully benefit from choice and innovation.
Responding to the investigation, Google’s competition director, Oliver Bethell, pointed out the CMA’s acknowledgment of the sector’s importance for growth. Google plans to engage with the CMA to explain how its services benefit consumers and businesses, while also highlighting potential drawbacks of overly prescriptive regulations. Bethell stressed the importance of a balanced regulatory approach that fosters innovation and consumer choice.
This move comes in the wake of pressure from U.S. prosecutors, who in November argued that Google should be forced to sell its Chrome browser and make search results and data available to competitors. In the U.S., a judge ruled in August that Google had violated antitrust laws, having spent billions to become the default search engine worldwide.
In the UK, Google is already facing scrutiny from the CMA in relation to the cloud computing market, alongside Amazon and Microsoft, as well as its dominance in mobile browsers in collaboration with Apple. The CMA is empowered by new regulations to designate companies with Strategic Market Status (SMS), allowing for in-depth investigations of firms like Google.
The CMA’s investigation will assess whether Google holds SMS in both search and search advertising markets. It will also explore if Google’s market dominance leads to preferential treatment for its own services, as well as the potential barriers to entry and innovation in the sector. Additionally, the watchdog will look into how Google handles consumer data.
The rise of AI-powered search engines, like ChatGPT, poses a long-term challenge to Google’s market dominance. The CMA will also consider whether Google is using its influence to shape the development of new AI services and interfaces to mitigate these emerging competitors. The investigation, which could last up to nine months, may lead to regulatory interventions such as requiring Google to share data with other businesses or allowing publishers more control over how their content is used in Google’s AI services.