Britain’s competition regulator has officially designated Google with “strategic market status” in online search and search advertising, marking the first major deployment of sweeping new powers designed to curb the dominance of Big Tech firms.
The Competition and Markets Authority announced on 10 October that Google meets the criteria under the Digital Markets, Competition and Consumers Act, which came into force in January 2025, following a nine-month investigation into the search giant’s stranglehold over the UK market.
The designation itself does not constitute a finding of wrongdoing, but it grants the CMA unprecedented authority to impose binding conduct requirements on how Google operates its search services in Britain, with potential fines reaching up to 10% of the company’s global annual turnover for non-compliance.
“We have found that Google maintains a strategic position in the search and search advertising sector – with more than 90% of searches in the UK taking place on its platform,” said Will Hayter, the CMA’s Executive Director for Digital Markets. “Having taken into account the feedback received following our proposed decision, we have today designated Google’s search services with strategic market status.”
Unprecedented Regulatory Framework
The strategic market status designation represents the inaugural use of Britain’s new digital markets competition regime, which mirrors aspects of the European Union’s Digital Markets Act but adopts a more tailored, investigation-driven approach. Under the legislation, companies can be designated with strategic market status if they hold “substantial and entrenched market power” and occupy a “position of strategic significance” in a digital activity.
Google’s dominance in the UK search market is virtually unchallenged. Current data shows the tech giant commands approximately 92.6% of all search queries across devices in the UK, with nearest rival Bing holding just 4.6% and Yahoo a distant third at 1.6%. On desktop alone, Google’s share stands at 81.9%, whilst Bing captures 13.1%.
The CMA’s investigation found that Google’s index of billions of websites, access to trillions of historical searches, and ecosystem of interconnected services create barriers that are “extremely hard for others to replicate”. More than 200,000 UK businesses rely on Google search advertising to reach customers, collectively spending over £10 billion annually on the platform.
Scope Includes AI Features
Significantly, the CMA’s designation extends to Google’s AI-driven search features, including AI Overviews and AI Mode, which have been increasingly integrated into search results. However, the regulator has opted not to include Google’s standalone Gemini AI assistant within the current scope, though it reserves the right to revisit this decision as the market evolves.
This approach reflects the watchdog’s acknowledgement that generative AI is rapidly transforming the search landscape, even as traditional search maintains overwhelming dominance. The CMA noted that whilst use of AI assistants is growing, it remains “significantly smaller than Google search”.
Google Warns of Innovation Risk
Google has responded to the designation with caution, warning that overly stringent regulations could damage the UK’s position as an early beneficiary of technological innovation.
“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,” said Oliver Bethell, Google’s Senior Director of Competition. “Others pose direct harm to businesses, with some warning that they may be forced to raise prices for customers.”
In a blog post published following the designation, Bethell emphasised that Google Search contributes £118 billion annually to the UK economy. The company recently pledged a £5 billion investment in British AI infrastructure over the next two years, including a new data centre in Waltham Cross, Hertfordshire.
Google has also pointed to what it characterises as negative consequences of the EU’s Digital Markets Act, claiming the regulation has cost businesses an estimated €114 billion. “The UK enjoys access to the latest products and services before other countries because it has so far avoided costly restrictions on popular services, such as Search,” Bethell wrote.
However, the CMA appears determined to press ahead. Sarah Cardell, the regulator’s Chief Executive, stated that the proposed measures would “give UK businesses and consumers more choice and control over how they interact with Google’s search services – as well as unlocking greater opportunities for innovation across the UK tech sector”.
