Google given ‘Strategic Market Status’, paving way for search engine changes

Strategic Market Status is a designation the CMA applies to a firm that holds substantial and entrenched market power and occupies a position of strategic significance in a digital activity.

It is reserved for the largest tech firms, where one company’s dominance is so great – in Google’s case, accounting for over 90% of searches in the UK – that it acts as an unassailable gateway for consumers and businesses.

The SMS designation is not a finding of legal wrongdoing. However, it enables the CMA to introduce targeted measures to ensure markets are open to effective competition and that consumers and businesses are treated fairly.

The CMA confirmed the status following an extensive investigation and consultation with over 80 stakeholders. Crucially, the designation’s scope includes Google’s AI-based search features like “AI Overviews” and “AI Mode,” but it currently excludes the separate Gemini AI assistant, a position the regulator will keep under review.

The designation now empowers the CMA to consider a “roadmap” of proportionate interventions, with consultations expected later this year. Potential measures could include forcing Google to introduce “choice screens” allowing users to easily select alternative search providers, setting fair principles for website ranking and giving publishers more control over how their content is used.

Google has cautioned against measures that might “inhibit UK innovation and growth,” arguing that the current status quo provides significant value to UK businesses. However, digital markets boss Will Hayter stressed that promoting competition will “unlock opportunities for businesses big and small.”

The decision has also been widely welcomed by consumer groups. Rocio Concha, Which? Director of Policy and Advocacy, said:

“The decision to formally designate Google with Strategic Market Status is an important step to improving competition in digital markets.

“The CMA’s careful evidence gathering makes a compelling argument that Google meets the criteria for SMS for Google Search. Online search is evolving as GenAI tools become more widely used, but the CMA must still act to tackle the harmful dominance Google has now and to promote competition between GenAI tools.”