UK CMA Gives Google Search Strategic Market Status

The UK’s competition watchdog has given Google’s search business “strategic market status,” a powerful label that could lead to custom-tailored, enforceable regulations about how the company functions in search and search advertising. The action, which comes under the UK’s new digital markets regime, marks the beginning of a more rigorous phase of oversight for the core service that powers Google’s revenues and reach.

The Competition and Markets Authority said that Google held a position of power in general search, large and durable enough to merit special regulation to protect competition and consumer choice. Although the label itself doesn’t prescribe remedies, it allows the regulator to consult on interventions and, if necessary, to enforce them, possibly with substantial penalties for non-compliance.

What Strategic Market Status in the UK Entails

SMS is a feature of the UK’s Digital Markets, Competition and Consumers Act that provides the CMA’s digital markets unit with powers to impose conduct requirements onto large digital companies. Breaches can be punishable by fines of up to 10% of a company’s worldwide turnover, indicating the seriousness with which the regime is taken.

In practice, the SMS enables the regulator to design rules around a particular “digital activity” and tackle behaviors that can lead to user lock-in, to foreclose rivals, or disadvantage business partners. It also paves the way for structural remedies and pro-competitive interventions if conduct rules prove to be inadequate.

Why Google Was Designated with SMS Status

The CMA refers to long-standing dominance and insufficient competitive constraints in general search. In its own words, alternative engines are still minnows; Bing takes up less than 5% of searches and search ad revenues in the UK — a position which hasn’t changed materially in over ten years.

Network effects from data, rich default placements and search-advertising stack integration all make Google’s situation more durable. Measures from outside StatCounter broadly tell the same story: Google’s share of search in the UK often exceeds 90 per cent when you look at measures such as that used by StatCounter, meaning there is little room for rivals to grow.

AI Search Features and Spheres of Influence under SMS

The designation applies to Google’s core search and search advertising services and specifically mentions AI-powered features like AI Overviews and AI Mode among the products whose new titles will have to comply with the regulation. It also covers the Discover feed and integrated search news surfaces (Top Stories, News tab).

The Google News app and website are not included here, nor are search syndication services. The CMA said it will review the boundaries as search based on AI develops, saying Gemma, Google’s Gemini assistant, is excluded currently but may be considered.

Potential Remedies on the Table for Google Search

The CMA is said to be intending to consult on interventions this year. The options under consideration include user choice screens allowing people to switch away from Google without losing functionality, data portability requirements for advertisers and publishers ensuring they can work with multiple companies rather than being locked in, as well as steps by Google to prevent the self-preferencing of its own services through measures like unfair ranking of results and ads.

Another likely focus will be transparency and attribution in AI-generated answers – making sure that sources are visible and attributed, that publishers receive clear links rather than traffic being sponged up by summaries. The regulator is also examining mechanisms of consent on how user and publisher data are used to fuel AI features, and access to performance data so that competition remains fair.

Key Implications for Advertisers and Publishers

Before any rule changes even bite, the consultation alone will already cause brands and agencies to look into dependencies on Google’s ad stack and measurement tools. If competitors win distribution through choice screens or interoperability requirements, auction dynamics and cost-per-click trends could change.

Publishers are looking to see how AI Overviews treat backlinks, credits and traffic. If the CMA compels more clear attribution or diverse clickable paths from AI answers, it may ease fears about whittling down traffic from search — at least for news and reference content surfaced in Top Stories and Discover.

How Google Is Responding to UK Strategic Market Status

Google claims that such heavy-handed restrictions could mean a significant slowdown on product rollout in the UK at the exact time AI development is reaching critical mass, urging regulators to “create a balance between managing risks and encouraging innovation”. The company has cited studies saying that poorly written regulations elsewhere have saddled businesses with high costs and warned that stifling innovation will boost prices.

The firm is expected to advocate for flexible obligations that safeguard the rapid iteration in AI search but tackle the CMA’s competition concerns – particularly around defaults, ranking fairness and data use.

What to Watch Next as the CMA Consults on Remedies

The CMA’s consultation will make clearer the exact conduct standards and timings and how enforcement fits with privacy rules imposed by the Information Commissioner’s Office and content standards managed by Ofcom. The UK regime provides for legal recourse to the Competition Appeal Tribunal by companies designated, so that there is a sense of judicial oversight.

The UK’s intervention is one of a number of international regulatory actions designed to curb platform power, which include the few-weeks-old EU Digital Markets Act and Germany’s beefed-up abuse control under Section 19a. For Google, the SMS move looks like a significant regulatory milestone—while also serving as a demonstration of how AI-era search can be ruled without choking off the engine driving the modern web.