UK watchdog flags Google's dominance in search ads under new digital rules

The Competition and Markets Authority said, investigation found that the Google has strategic market status because it has substantial and entrenched market power in general search and search ads

Britain's antitrust watchdog on Friday labelled Google a strategic player in the online search advertising market, paving the way for regulators to force the company to change its business practices to ensure more competition in that market.

The Competition and Markets Authority said its investigation found that the US 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 UK 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 per cent of the UK'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 UK investigation into whether their mobile ecosystems should be given strategic market status, with a decision expected by Oct. 22.