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LONDON – The British competition watchdog on Tuesday opened an investigation into the matter Google search services, marking its first major investigation under the country's tough new competition rules.
The Competition and Markets Authority said it is looking to assess whether Google has a “strategic market position” (SMS) under the UK’s new Digital Markets, Competition and Consumer (DMCC) Code.
The DMCC, which officially came into force on January 1, aims to prevent anti-competitive behavior in digital markets. Classifying a company as having 'SMS' would give the regulator the ability to impose changes to prevent anti-competitive behaviour.
Sarah Cardell, chief executive of the CMA, said the regulator was investigating Google's dominance of the search market to ensure a “level playing field” – especially as artificial intelligence changes the way people search online.
“Our mission is to ensure people get the full benefit of choice and innovation in search services and get a fair deal – for example in how their data is collected and stored,” Cardell said.
“And for businesses, whether you're a competitor search engine, an advertiser or a news organization, we want to ensure there's a level playing field for all businesses, big and small, to succeed,” she added.
The Capital Markets Authority's move follows an offer from the US Department of Justice Forcing Google to withdraw its Chrome browser. The Department of Justice filed a request to break up the internet giant after finding that it had a monopoly on the search market.
The regulator on Tuesday highlighted Google's dominant position in the UK search market as a key point of interest.
Google accounts for more than 90% of all general search queries in the UK, and more than 200,000 advertisers in the country use the company's search advertising tools, according to the CMA.
The Capital Markets Authority said research is “vital for economic growth,” and explained that its role in connecting companies with other companies, investors and customers means it is “important” that competition works well.
“Google Search supports millions of UK businesses to grow by reaching customers in innovative ways. Today's CMA announcement recognizes that,” a Google spokesperson told CNBC via email.
A Google spokesperson added: “We will continue to work constructively with the CMA to ensure that the new rules benefit all types of websites, while allowing people in the UK to benefit from useful and cutting-edge services.”
The CMA added that effective competition in search is necessary to ensure fair treatment of news publishers regarding the use of their content.
With the emergence of new AI-based search methods such as OpenAI and Perplexity, the CMA said it was also concerned about Google's market position which could put new and innovative players at a disadvantage.
