Britain's antitrust watchdog, the Competition and Markets Authority, is wasting no time in filing its first formal inquiry in 2025 under new rules that came into force this month. The company will discuss new initiatives it is taking on in AI search and its huge search advertising business, as well as what remedies it may impose to improve competition in the space. We are investigating Google's market power.
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This is the first of two investigations the CMA is promising Big Tech this month under the new rules, so it will be interesting to see which companies become the subject of the second investigation. be.
“Millions of people and businesses across the UK rely on Google's search and advertising services,” CMA chief executive Sarah Cardell said in a statement. “That’s why, especially with AI has the potential to transform search services, so it is critical that we ensure that these services deliver positive results for people and businesses and level the playing field. to maximize the benefits of choice and innovation, It's about ensuring fair trade around how data is collected and stored, and for all companies, large and small, to succeed, including competing search engines, advertisers, and news organizations. We want to ensure a level playing field.”
The CMA chose easy targets. We already know that Google searches account for over 90% of common search queries in the UK, and that over 200,000 businesses use the portal to advertise.
Additionally, Google has already lost or is losing multiple antitrust lawsuits in other jurisdictions over its search dominance. More recently, in its huge homeland of the United States, along with multiple search lawsuits in Europe. The CMA said it was “in regular contact” with other authorities.
The issue before the CMA is whether Google's search business can be recognized as a “strategic market position” (SMS). Once designated, “the CMA will be able to impose conduct requirements and propose pro-competitive interventions to achieve positive outcomes for UK consumers and businesses.”
The plan is to consider three main areas.
First, it considers whether Google presents “weak competition and barriers to entry and innovation in search.” Competition is already weak (see market share above), but given the advances of companies like OpenAI in providing “answers” as alternatives to basic search queries, there is no doubt that barriers to innovation are Debatable.
It will also examine whether Google is prioritizing its own services in areas such as advertising and AI. And finally, we investigate whether Google is using large amounts of consumer data without informed consent. This includes the use of content from intellectual property owners and publishers.
In the most drastic case, the investigation could take the form of a proposed separation, as is done in the United States. Other remedies may include making the search results available to competitors, separating out the parts of the search engine that are integrated, and publishing advertisements, such as providing some of the results to other parties. Masu.
This has already come to the attention of the CMA, which said in a statement: “Effective competition can reduce the cost of search advertising by nearly £500 per household per year, which in turn drives down prices across the economy.” “There is a possibility that it will happen,'' he said.
Another big area to focus on here is AI.
The study's release comes at a time when Google itself is working to improve its search experience in the face of new competition from AI-based services. Services like ChatGPT and Perplexity use generative AI technology to build effective alternatives to google.com. This allows users to ask questions and receive fully formatted results rather than a long list of links, which can eliminate links to other sites altogether.
Google itself has built its own version of this experience, called Gemini, which returns fully formatted “answers” to search queries at the top of its own results page. The fact that Google now has a unit at the top of the search page that provides results from its own generative AI technology could potentially give Google a window where it could be requested to provide GenAI results from other parties. There is a gender.