Google’s advanced AI search features have been brought under a new, stricter regulatory regime in the UK, after the national competition watchdog designated the company with “strategic market status.” The Competition and Market Authority (CMA) confirmed the status applies not only to traditional search but also to Google’s AI Overview and AI mode features, giving the regulator power to enforce changes.
This is the first time the CMA has used its authority under the new Digital Markets, Competition and Consumers Act 2024 to target a specific company. The decision is based on Google’s overwhelming dominance, with its platform accounting for over 90% of UK searches. The “strategic market status” (SMS) enables the CMA to implement bespoke rules for Google’s operations.
The regulator is actively considering interventions that could reshape how users interact with search. One prominent idea is the introduction of “choice screens” that would present users with a selection of search providers, including AI-focused rivals like ChatGPT and Perplexity. The CMA also aims to establish rules for fair search rankings and give publishers more control over how their content is ingested and presented by AI.
Google has warned that these new regulations could have a chilling effect on innovation. Oliver Bethell, the company’s senior director for competition, suggested that the interventions could slow down the launch of new AI-based products in the UK. This stance is countered by legal experts like Tom Smith, a former CMA director, who sees it as a necessary step to address long-standing market distortions.
The CMA has clarified that the SMS designation will not lead to immediate action but will initiate a consultation on potential conduct requirements later this year. The move is a clear indication of the regulator’s intent to closely monitor the impact of AI on market competition, with a parallel investigation into Apple and Google’s mobile ecosystems also in progress.
