UK may force Google to revamp search rankings under new digital laws

Designated market status awaits the search giant

CMA's findings suggest Google's dominance is dampening innovation and driving up the cost of online visibility for UK companies.

Google could soon be compelled to overhaul how it ranks search results and offer users more alternatives, under a landmark move by the UK's competition watchdog aiming to rein in the tech giant's dominance.

The Competition and Markets Authority (CMA) on Tuesday unveiled plans to designate Google with Strategic Market Status (SMS), a powerful new label under the UK's Digital Markets Competition and Consumers Act, which came into force earlier this year.

If finalised, the designation would subject the company to a binding set of behavioural rules designed to improve competition, transparency, and innovation in Britain's digital economy.

The CMA said the proposals would mark the first major enforcement of the UK's tough new digital market regime.

Google's search engine accounts for more than 90% of general search queries in the UK and serves as a critical pathway for more than 200,000 businesses, which collectively spent over £10 billion last year on Google search advertising.

The CMA believes the company's dominance may be leading to inflated advertising costs and limiting competition.

"Google search has delivered tremendous benefits," said CMA Chief Executive Sarah Cardell. "But our investigation so far suggests there are ways to make these markets more open, competitive and innovative."

"These targeted and proportionate actions would give UK businesses and consumers more choice and control over how they interact with Google's search services."

The proposed designation follows an investigation launched in January to determine whether Google's market power is delivering fair outcomes for UK users and businesses.

The CMA's findings suggest that Google's dominance is dampening innovation and driving up the cost of online visibility for UK companies.

Key remedies under consideration include:

1. Fair Ranking Rules: Google may be required to revamp how it ranks search results to ensure smaller competitors and alternative services are fairly represented.
2. Content Control for Publishers: Google could be forced to grant publishers more control over how their content is used – including how or whether it appears in AI-generated search responses.
3. Choice Screens: Google might need to provide "choice screens" to enable easier switching between search providers.
4. Ad Market Reforms: The CMA flagged that Google's market power could be contributing to artificially high advertising costs.

No final decision has been made, and the next steps will involve a public consultation before a definitive ruling by October.

But Google hit back strongly at the proposals.

Oliver Bethell, Google's Senior Director for Competition, warned that subjecting Google to this regulation could stifle innovation and delay product rollouts in the UK.

"We're concerned that the scope of the CMA's considerations remains broad and unfocused, with a range of interventions being considered before any evidence has been provided," Bethell said.

"The UK has historically benefited from early access to our latest innovations, but punitive regulations could change that."

Google, which is investing $1 billion in a major new datacentre outside London, warned that overregulation could put such investments at risk.

The CMA's investigation comes as Google faces mounting scrutiny worldwide.

In the US, the company has already lost two historic antitrust cases concerning its search engine and advertising empire.

Earlier this year, Google announced several changes in its search, Android and ad services, in efforts to comply with the EU Digital Markets Act (DMA).