The UK Competition and Markets Authority (CMA) will force Google to loosen control over its search engine as it becomes the first company to be handed a special status under new digital laws that came into effect this year.
The CMA said on Friday that it had determined the Big Tech company should be given so-called “strategic market status” (SMS) in light of its dominant position in search and advertising.
The label means that Google must abide by a list of rules to ensure it is not abusing its position. The CMA will consult on possible interventions later this year.
The decision comes after a nine-month investigation by the regulator, which signalled in January that Google was likely to be designated as having SMS. The decision is the first under strict new UK digital laws that require businesses with an outsized impact in certain digital markets to be granted the label and subjected to specific rules.
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The regulator said in June that Google might be forced to implement new “fair ranking” measures in its search results and give publishers more control over how it uses their content, including in output generated by artificial intelligence.
However, the regulator said on Friday that Google’s Gemini AI assistant was not included in the designation, a decision that will be kept under review and could be amended in the future. Other AI-based search features, such as AI Overviews and AI Mode, are included under its new status.
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“We have found that Google maintains a strategic position in the search and search advertising sector – with more than 90 per cent of searches in the UK taking place on its platform,” said Will Hayter, executive director for digital markets at the CMA.
He added: “By promoting competition in digital markets like search and search advertising we can unlock opportunities for businesses big and small to support innovation and growth, driving investment across the UK economy.”
Oliver Bethell, Google’s senior director for competition, said: “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.”
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Google last month said it planned to spend £5bn in the UK over the next two years, primarily on capital expenditure for data centres and AI research. Many staff in its AI unit DeepMind are based in London and the Silicon Valley-based company is putting the finishing touches to a new office building in the capital’s King’s Cross neighbourhood.
However, Google has warned that an unfavourable regulatory regime in the UK could force it to delay the launch of new products and services.
Google is also facing potential SMS designation, along with Apple, over its mobile platforms. A decision from the CMA is due later this month.
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The investigations come at a difficult time for the CMA, which is attempting to apply the new digital markets laws without being seen as hostile to business.
The agency has come under intense scrutiny from the UK government this year and been handed a clear mandate to focus on growth to ensure Britain is seen as attractive for investment. – Copyright The Financial Times Limited 2025
