The UK’s competition regulator has officially moved to rein in Google’s immense power over the search market. On Tuesday, the Competition and Markets Authority (CMA) proposed designating the company with a “Strategic Market Status” (SMS). This is the first proposed use of powerful new tools under the country’s Digital Markets, Competition and Consumers (DMCC) Act. It signals a new, more interventionist era of tech regulation in the UK.
The designation, if finalized by its October 13 deadline, would empower the CMA to enforce targeted rules on Google’s search and advertising businesses. These services currently handle over 90% of all general search queries in the UK. The regulator’s official announcement includes a roadmap of potential actions, such as enforcing fairer search rankings, requiring user choice screens for rival services, and giving publishers more control over how their content is used in AI-generated summaries.
This action follows a CMA investigation that heard widespread concerns about Google’s market power. These included its hard-to-replicate data advantage, the impact of its default agreements with device makers, and the high cost of search advertising. CMA Chief Executive Sarah Cardell said the goal is to make the market more open and innovative. In response, Google’s senior director for competition, Oliver Bethell, stated, “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.”
The Consumer Dilemma: AI’s Promise vs. Ingrained Habit
Underpinning the regulatory action is a complex consumer landscape where ingrained habit, not active choice, overwhelmingly favors Google. A qualitative research report commissioned by the CMA found that while users are turning to generative AI for complex tasks, they default to traditional search engines for most queries. This behavior is driven by familiarity and a deep-seated trust deficit in AI-generated answers.
The research revealed that for “high-stakes” searches—such as those involving financial decisions or important work—consumers consistently use traditional search engines to validate information from AI assistants. This dynamic highlights a key challenge for competitors. Even as new AI tools emerge, they are not yet seen as reliable replacements for the habitual nature of using Google.
This user inertia presents a major hurdle for one of the CMA’s proposed remedies: choice screens. While intended to boost competition, such tools have a history of limited effectiveness. According to Mozilla Research, a similar browser choice screen implemented for Android in Europe did not appear to have a “meaningful impact on consumer choice or competition,” suggesting that overcoming the power of the default is a monumental task.
The Publisher Crisis: An ‘Existential Threat’ from AI Summaries
A critical factor driving the CMA’s intervention is the growing crisis facing online publishers. They report that AI-driven search is decimating the referral traffic that forms the foundation of their business models. The shift from a list of links to direct AI-generated answers is creating what Cloudflare’s CEO recently described as an “existential threat” to the ad-supported web, backed by stunning new data showing a catastrophic collapse in traffic.
UK publisher groups have welcomed the CMA’s focus on this issue. Owen Meredith, chief executive of the News Media Association (NMA), called the move a critical step to address the harm caused by Google’s dominance, stating, “For too long, news publishers have been subject to Google’s anti-competitive behaviour which has been hugely damaging for journalism.” He added that the NMA will continue to engage with the CMA to ensure the new regime delivers “meaningful and effective solutions” to level the playing field.
Publishers like Mail Online have complained of a “sharp reduction in traffic” where AI Overviews are present and noted that Google refuses to allow them to track clicks from these summaries specifically.
The financial fallout has ignited a global battle for compensation. In Germany, a media consortium is now demanding approximately €1.3 billion annually from Google for using their content. The CMA’s roadmap directly addresses this by making “more control and transparency for publishers” an early priority, aiming to ensure they are treated fairly as Google incorporates their content into its AI features.
A Global Gauntlet: UK Action in International Context
The CMA’s action is not happening in a vacuum. It is part of a coordinated global push to hold Google accountable for its market power. The European Union is on the verge of upholding a record €4.12 billion fine against Google for abusing its Android dominance, and is separately investigating its lucrative ad-tech business.
Across the Atlantic, the U.S. Department of Justice is pursuing its own aggressive antitrust actions. A federal judge has already found Google liable for illegally monopolizing parts of the ad-tech market. In a separate case focused on its search monopoly, the DOJ is seeking major structural remedies, including the potential divestiture of the Chrome browser.
While the goals are similar, the UK’s new DMCC Act allows for a more flexible, bespoke approach compared to the EU’s broader Digital Markets Act (DMA). The CMA’s ability to create a tailored “roadmap” of interventions for a specific company like Google is a key difference. The full details of the UK investigation are available on the CMA’s official case page.
The CMA’s proposal represents a significant test for the UK’s new regulatory framework. While it reflects a global trend of holding tech giants to account, its ultimate success will depend on whether its tailored remedies can meaningfully alter a market shaped by years of user habit and powerful defaults. The outcome will not only shape Google’s future in the UK but will also serve as a key case study for this new, more agile model of tech regulation.
