Google may soon be required to change how its search engine operates in the UK after the Competition and Markets Authority (CMA) granted it “strategic market status” (SMS) under the country’s new Digital Markets, Competition and Consumers Act (DMCCA).
The landmark designation, announced on Friday, gives the regulator sweeping powers to impose legally binding rules on Google’s search and advertising businesses, which together dominate over 90 percent of all online searches in the UK.
While the CMA’s move does not constitute a finding of wrongdoing, it marks the first major test of Britain’s new digital markets law and opens the door for interventions aimed at curbing Google’s influence and promoting fairer competition.
Under the new status, Google could be required to display “choice screens” offering users alternative search engines, increase transparency over how search results are ranked, and provide publishers with more control over how their content is used and monetised.
Will Hayter, head of the CMA’s digital markets unit, said the decision reflects Google’s entrenched position in online search and advertising. “Google maintains a strategic position in the sector, with more than 90 percent of searches in the UK taking place on its platform,” he said. “Having taken into account feedback on our proposed decision, we have today designated Google’s search services with strategic market status.”
The CMA said its objective is to create “fairer competition and more choice for consumers” while encouraging innovation and reducing barriers for smaller players in the UK’s £20 billion digital advertising market.
Google responded by saying it would work with the regulator but warned that unclear or overly strict rules could stifle innovation. “UK businesses and consumers have been among the first to benefit from Google’s innovations,” said Oliver Bethell, the company’s senior director for competition. “Many of the ideas raised in this process would inhibit UK innovation and growth, potentially slowing product launches at a time of profound AI-based innovation.”
Sources told Business Matters that Google executives have become frustrated by the lack of clarity on what measures the CMA might impose. The company reportedly fears that unpredictable or sweeping regulations could make it more difficult to roll out new features in the UK, a concern echoed by other major technology firms watching the process.
The CMA is expected to consult on potential remedies over the coming months, with detailed proposals likely to be published later in 2025. These may include stricter transparency rules for search algorithms, limits on data sharing across Google’s advertising ecosystem, and oversight of how artificial intelligence is integrated into its products.
Officials stressed that the regulator’s goal is not to penalise successful companies but to ensure open and competitive digital markets. “Our role is to promote competition and innovation, not to stifle it,” a CMA spokesperson said.
The decision makes Google the first major tech company to be formally designated under the UK’s post-Brexit digital regulation regime — a framework that diverges from the EU’s Digital Markets Act and the more litigious U.S. approach. The CMA’s next steps will be closely watched by global tech giants including Meta, Amazon, and Apple as Britain tests its new powers to rein in the digital economy’s biggest players.
