The UK Competition and Markets Authority (CMA) officially announced that it has designated Google as a company with "Strategic Market Status" (SMS) in the search and search advertising services sector, meaning that Google will become one of the first technology giants to be subject to enhanced supervision under the UK's new digital market regulatory system.
UK Competition and Markets AuthorityPoint out, Google has "substantial and entrenched market power" in the general search market, and its monopoly position has a significant impact on digital competition and industry fairness.
Search services hold 90% of the market share; the UK Competition and Markets Authority will intervene against "unfair practices"
In January this year, the UK Competition and Markets Authority took action against Google’s search and search advertising markets.InvestigationAccording to the survey, Google currently controls over 90% of search traffic in the UK market, and its dominant position has a profound impact on the related advertising and platform ecosystem.
Will Hayter, executive director of digital markets at the UK Competition and Markets Authority, said: "Google maintains a strategic position in search and search advertising and it is crucial to ensure that the market remains open to other competitors and that businesses that rely on Google's platform continue to receive fair treatment."
Under the new system, the UK Competition and Markets Authority can conduct proactive market intervention against companies with a "strategic market position", including requiring transparent algorithm operations, limiting the priority of its own services, or forcing the provision of data interoperability standards.
This move will make the UK the second major market after the European Union to adopt an "ex ante regulation" strategy for large technology companies.
Google hits back: Regulation could hinder innovation and slow the launch of AI products
Google issued a statement in response to the UK Competition and Markets Authority's decisionPoint out, some of the regulatory ideas proposed by the UK Competition and Markets Authority "could hinder innovation and growth in the UK" and lead to delays in the launch of new features during a period of rapid evolution in AI.
Google emphasized that the UK was able to be a global leader in new services, such as Google Search, AI Overview, and AI Mode, thanks to its approach to not imposing overly restrictive measures. Overly restrictive measures risked repeating the mistakes of the EU's Digital Markets Act, leading to negative consequences such as higher costs and product prices for businesses.
In a statement, Google pointed out that the implementation of the EU's Digital Markets Directive has increased corporate operating costs by approximately 1140 billion euros, and believes that the UK should "avoid repeating the same mistakes." It also emphasized that if Google Search and AI-related innovations are restricted, it will ultimately be detrimental to users and the development of local industries.
The UK Competition and Markets Authority's next step: a new round of consultation on AI search and advertising
The UK Competition and Markets Authority announced that it will launch a public consultation on its intervention measures before the end of the year, focusing on how to strike a balance between fair competition and user interests in search services and search advertising. It's worth noting that this designation, while covering Google's AI Overview and AI Mode features, does not currently include the Gemini AI assistant service.
As the global digital market enters a new AI-driven era, Google will face multiple regulatory pressures from the EU, the UK, and the US. For the outside world, this tussle between regulation and innovation is not only a debate about policy direction but also a crucial test of how future search technology and generative AI will coexist.
