The
Competition and Markets Authority said its investigation found
that the U.S. tech giant has “strategic market status" because
it has “substantial and entrenched market power” in general
search and search advertising.
It marks the first time the watchdog has issued the designation
since new U.K. digital rules took effect at the start of the
year.
The label doesn't imply any wrongdoing. But the regulator said
it means it has the power to consider using “proportionate,
targeted" measures to make sure “general search services are
open to effective competition” and that consumers and businesses
are treated fairly.
Online search ads appear alongside results from Google's search
engine, usually tagged as “Ad” or “Sponsored" — versus online
display ads, which appear on a company's website. The CMA says
Google accounts for more than 90% of the U.K.'s online searches
and more than 200,000 of the country's businesses rely on Google
search ads to reach customers
Google said it expects to face new rules and regulations on how
its search service works.
The CMA didn’t announce any immediate fixes, saying it plans to
begin discussions later this year.
The watchdog has previously outlined possible remedies,
including giving users “choice screens” for rival search
services when they use products like the Chrome browser and
Android mobile operating system. Another proposal is forcing
Google to make search results ranking and presentation fair and
non-discriminatory, and give businesses an effective way to
complain if they’ve been treated unfairly.
“Many of the ideas for interventions that have been raised in
this process would inhibit UK innovation and growth, potentially
slowing product launches at a time of profound AI-based
innovation,” Google's senior director for competition, Oliver
Bethell, said in a blog post. “Others pose direct harm to
businesses, with some warning that they may be forced to raise
prices for customers.”
Google, along with Apple, is the subject of a separate U.K.
investigation into whether their mobile ecosystems should be
given strategic market status, with a decision expected by Oct.
22.
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