Panoramic view of Google’s headquarters in King’s Cross. A tech giant is facing a £5bn lawsuit in the UK for allegedly abusing its dominance in online search.
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LONDON — Britain’s competition regulator activated new regulatory powers on Friday. googleThe raid leaves the U.S. tech giant in the crossfire of further regulatory action.
The Competition and Markets Authority has confirmed Google’s ‘strategic market position’ designation for general search and search advertising services. This follows a nearly nine-month investigation in which the watchdog concluded that the tech giant had “substantial and entrenched market power.”
The watchdog said Google’s Gemini AI assistant was not within its scope, but other AI-based search features were.
“More than 90% of searches in the UK are conducted on Google’s platforms, demonstrating that Google maintains its strategic position in search and search advertising,” Will Hayter, executive director of digital markets at the CMA, said in a statement.
“In light of the feedback we received after our proposed decision, today we have designated Google’s search service a strategic market position.”
The CMA said the designation was not a “finding of wrongdoing” but did mean Google may have to change how search works in the UK.
The CMA said it is currently unclear what such measures would look like, as consultation on potential intervention is expected to begin later this year.
But a roadmap announced in June could require tech giants to implement fairer search rankings and give publishers more control over how their content is used, including through AI-generated responses.
Google said its search products contribute billions of pounds to the UK economy and the country has so far been able to avoid costly restrictions on some popular services.
Oliver Bethel, Google’s senior director of competition, said: “Many of the intervention ideas raised in this process could stifle innovation and growth in the UK, potentially delaying product launches at a time when AI-based innovation is in full swing.”
He added that Google expects “results that reflect those ambitions in the critical months ahead.”
Britain should avoid ‘unduly burdensome regulations’
In fact, the company’s parent company Alphabet last month announced a £5 billion (then $6.8 billion) investment in the UK as part of its AI development efforts, including building a state-of-the-art data center just north of London.
British Finance Minister Rachel Reeves called the move “a powerful vote of confidence in the strength of the British economy and our partnership with the United States,” CNBC earlier reported.
“Traditionally, businesses and consumers in the UK have been the first to benefit from Google’s innovations, months earlier than businesses and consumers in Europe,” Google’s Bethel said in response to the CMA designation. Debbie Weinstein, president of Google Europe, said in a LinkedIn post several months ago that this was due to “regulatory uncertainty” in Europe.
To continue to benefit from these benefits, the UK should focus on “avoiding unduly onerous regulations and learning from the negative outcomes seen in other jurisdictions”, Bethel added.
The strategic market status designation reflects the CMA’s new powers, which came into force earlier this year and are aimed at “improving competition in digital markets and helping to drive innovation, investment and growth across the UK economy”.
The CMA is also investigating Google’s mobile business in a separate case.
