Report from MediaPost
In Brief – The UK Competition and Markets Authority (CMA) has that Google holds “strategic market status” (SMS) in the markets for general internet search and search-based advertising. SMS is a regulatory status under the UK’s Digital Markets, Competition and Consumer Act (DMCC) that is based on the CMA determining that a business has a “substantial and entrenched” position in a digital market and requires special regulations to ensure fair competition. The CMA determined that more than 90% of searches in the UK take place on Google’s platform. The regulator noted that a designation of SMS is not a finding of wrongdoing but does enable it to “consider proportionate, targeted interventions to ensure that general search services are open to effective competition, and that consumers and businesses that rely on Google can have confidence that they are treated fairly.” Google’s AI-based search features such as AI Overviews are within the scope of the designation.
Context – The DMCC is the UK equivalent of the EU Digital Markets Act (DMA). There are operational differences between the two regimes, and the EU system has a couple of year head start. The DMA sets out 18 high-level competition policy-inspired mandates for “core platform services” of “gatekeeper” companies. The specific DMA requirements are being created on the go via company-by-company investigations. The DMCC process involves a CMA regulatory process to designate that a digital giant has SMS status in a market, which is like being designated a core platform service under the DMA. Then the CMA establishes tailored rules for the SMS platform and enforces them. Google Search is the first platform to be fully designated. Processes are underway for the Apple and Google mobile ecosystems and the Amazon and Microsoft cloud businesses. Plan for them to eventually be designated as well. This was the point of the DMCC. While the UK is setting up digital regulatory regimes that parallel the EU, the Starmer Government is trying to create the impression that the UK is more digital business friendly. They are moving more deliberately, but that distinction may not make much difference if the mandates are similar.