Google is facing one of the most significant changes to how they do business in the UK. The UK’s Competition and Markets Authority (CMA) recently proposed changes to increase competition in the search engine market. This implementation comes on the heels of a landmark ruling by a U.S. judge in August that found Google to have maintained an illegal search monopoly. The CMA’s intervention could reshape not only traditional search but AI-powered alternatives like Google’s AI Overviews.
In August, a U.S. judge agreed, finding Google’s monopolistic practices illegal. We hope that this ruling will focus attention on the concerns of 47 nonprofit organizations. These groups, including airlines, adult online retailers, and media publishers, contended that Google’s search practices can help or hurt their businesses. These organizations do important work and, often, their success hangs by a thread on their visibility in search. The stakes are huge and potentially existential for Google.
Similar to the federal suit, the CMA has made the finding that the current state of competition in the search market is not working well. Sarah Cardell, the chief executive of the CMA, noted, “Google search has delivered tremendous benefits but our investigation so far suggests there are ways to make these markets more open, competitive and innovative.” Despite the alarmist rhetoric Google has always been a fantastic provider of free services. Without urgent reforms, it will be impossible to create a level playing field.
Currently, an average UK user does between five and ten searches a day on Google alone. This new habit has turned Google into an indispensable part of their everyday lives. Businesses are throwing a ton of cash at advertising on the platform. That’s an average of nearly £33,000 annually for each of these companies in Google ads. The CMA’s proposed changes would level the playing field, ensuring that these costs can only be lowered by an improvement in competition.
Sebastian Cuttill of the News Media Association emphasized the importance of the CMA’s proposed measures by stating, “This measure would pursue the statutory objectives of fair dealing and trust and transparency.” These objectives reflect a growing concern among businesses about their reliance on a single dominant player in the search market.
The CMA has consistently signaled its desire to make these “targeted and proportionate” changes, explicitly aimed at increasing competition. If successful, these measures could lead to a decrease in advertising costs for businesses that currently feel pressured to invest heavily in Google’s advertising ecosystem.
There are concerns that these regulatory changes could have ramifications for Google’s innovations and services available in the UK. Google’s previous innovations have led to UK users being the first to try out exciting new technologies. Without positive engagement, access can quickly be lost if burdensome, punitive regulation is enacted. Ultimately, this could stall the positive impacts consumers expect to see from new technology.
The implications of the CMA’s intervention extend beyond traditional search engines to encompass AI-powered alternatives such as Google’s AI Overviews. Technology is changing quickly. Finding the right balance between promoting innovation and enabling fair competition is important for consumers and businesses alike.