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LONDON — Britain’s competition watchdog on Tuesday opened an investigation into Google search services, marking its first major probe under the country’s tough new competition rules.
The Competition and Markets Authority said that it’s looking to assess whether Google has “strategic market status” (SMS) under the new U.K. Digital Markets, Competition and Consumers Act (DMCC).
The DMCC, which officially entered into effect on Jan. 1, aims to prevent anti-competitive behavior in digital markets. Designation of a company as having “SMS” would give the regulator the power to impose changes to prevent anti-competitive behavior.
Sarah Cardell, the CMA’s chief executive, said the regulator was probing Google’s dominance of the search market to ensure a “level playing field” — especially as artificial intelligence is shifting the way people search online.
“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,” Cardell said.
“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,” she added.
The CMA move follows a bid from the U.S. Department of Justice to force Google to divest its Chrome browser. The DOJ filed to break the internet giant up after finding it holds a monopoly in the search market.
The regulator on Tuesday highlighted Google’s dominant position in the U.K. search market as a primary point of concern.
Google accounts for more than 90% of all general search queries in the U.K., and more than 200,000 advertisers in the country use the firm’s search advertising tools, according to the CMA.
Search is “vital for economic growth,” the CMA said, explained that its role in connecting companies with other businesses, investors and customers means it is “critical” that competition works well.
“Google Search supports millions of U.K. businesses to grow by reaching customers in innovative ways. The CMA’s announcement today recognises that,” a Google spokesperson told CNBC via email.
“We will continue to engage constructively with the CMA to ensure that new rules benefit all types of websites, and still allow people in the U.K. to benefit from helpful and cutting edge services,” the Google spokesperson added.
The CMA added that effective competition in search was needed to ensure fair treatment of news publishers for the use of their content.
With new AI-based search methods like OpenAI and Perplexity emerging, the CMA said it is also concerned about Google’s position in the market potentially putting new and innovative players at a disadvantage.
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