The Competition and Markets Authority has launched its first strategic market statusdesignation investigation under the new digital markets competition regime which came into force on New Year’s Day.
The investigation will assess Google’s position in search and search advertising services and how this impacts businesses and consumers including advertisers, news publishers, and rival search engines.
Google’s services have generated significant benefits in the UK. Its search services are a gateway through which millions of people and businesses access and navigate the internet. In the UK, Google accounts for more than 90% of all general search queries, and more than 200,000 UK advertisers use Google’s search advertising. Search is vital for economic growth. It facilitates businesses connecting with each other, with investors, and with their customers. And it generates a wealth of data that can be used to develop new AI products and services to foster innovation.
The CMA says that given the importance of search as a key digital service for businesses and the economy, it is critical that competition works well. Effective competition ensures people benefit from greater choice, new and innovative services, and have control over their data. Search services are also important as a route to access the news. Effective competition could help ensure that people can access a wide range of content and that publishers are treated fairly for the use of their content.
For businesses, effective competition could keep down the costs of search advertising, equivalent to nearly £500 per household per year, in turn lowering prices across the economy. An effective, competitive market could also allow businesses to innovate in a way which creates alternatives to traditional search services, including by, for example, ensuring that new AI start-ups can compete with Google and other existing players on an equal footing.
Under the digital markets competition regime, the CMA may designate firms with SMS in relation to a particular digital activity. Once designated, the CMA can impose conduct requirements or propose pro-competition interventions to achieve positive outcomes for UK consumers and businesses.
Sarah Cardell, Chief Executive of the CMA, said: “Millions of people and businesses across the UK rely on Google’s search and advertising services – with 90 per cent of searches happening on their platform and more than 200,000 UK businesses advertising there. That’s why it’s so important to ensure these services are delivering good outcomes for people and businesses and that there is a level playing field, especially as AI has the potential to transform search services.
“It’s our job 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. And for businesses, whether you are a rival search engine, an advertiser or a news organisation, we want to ensure there is a level playing field for all businesses, large and small, to succeed.”