Zoe Kleinman & Liv McMahon
Technology editor & technology reporter
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Google may have to make changes in the UK to give consumers more choice over who they use for online search services, the competition watchdog has said.
The Competition and Markets Authority (CMA) is investigating the US technology giant under a new law which means the regulator can demand changes at a firm if it is found to hold too much power in a particular market.
Google accounts for more than 90% of searches in the UK and 200,000 businesses use the company’s search advertising to reach customers.
Its parent company, Alphabet, said the CMA’s suggestions were “broad and unfocused” but added it would “work constructively” with the regulator.
The CMA said it was not accusing Google of anti-competitive practices at this time, but it has set out a “roadmap” of changes the company could make to its business ahead of a final decision in October.
These could include requiring “choice” screens for users to access different search providers as well as more transparency and control for publishers whose content appears in search results.
The watchdog said the average person in the UK makes between five and 10 searches a day and businesses spend an average £33,000 a year on Google adverts, but if competition was working well the figure could be lower.
“Google search has delivered tremendous benefits but our investigation so far suggests there are ways to make these markets more open, competitive and innovative,” said CMA chief executive Sarah Cardell.
She said that proposed “targeted and proportionate” changes “would give UK businesses and consumers more choice and control over how they interact with Google’s search services”.
But Google said that the outcome of the investigation and the suggested changes “could have significant implications for businesses and consumers in the UK”.
“The CMA has today reiterated that ‘strategic market status’ does not imply that anti-competitive behaviour has taken place – yet this announcement presents clear challenges to our business in the UK,” a spokesperson said.
They added the UK has “historically benefitted from early access” to Google innovations but said this could change as a result of “punitive regulations”.
‘Unintended consequences’
The watchdog launched its investigation into Google in January, saying it would look to ensure fair competition in online search.
Airlines, adult online retailers and media publishers were among 47 organisations which detailed how Google search practices help or hinder them.
EasyJet said changes to the search engine in the European Union, as a result of its sweeping digital markets law, sent more customers to online travel agencies and aggregators which misrepresented its services and prices.
Google said in November that boosting the visibility of rival search engines and comparison sites had formed part of changes needed to comply with the bloc’s Digital Markets Act.
But the move was to the detriment of airlines and hotel operators who lost out on direct traffic, it said.
Meanwhile, LoveHoney and Ann Summers, both of which sell sex toys, lingerie and sexual wellness products, said Google’s SafeSearch feature censoring explicit results had impacted the “discoverability” of their sites through its search engine.
Trade association UK Hospitality suggested the UK should avoid following in the EU’s footsteps with search requirements that could create “unintended consequences” for businesses and consumers.
AI implications
Sebastian Cuttill, of the News Media Association, said the CMA’s intervention could have big implications not just for traditional search but also for artificial intelligence (AI) powered alternatives such as Google’s own AI Overviews.
Increasing Google’s transparency over the use of news content in such services would be “massive” for publishers, he told the BBC.
News organisations including the BBC have voiced concern over use of their content to develop tech firms’ AI tools without consent or compensation.
“This measure would pursue the statutory objectives of fair dealing and trust and transparency,” said Mr Cuttill.
Google’s search operations have also faced heightened scrutiny by regulators in other countries.
A US judge ruled last August that the company had operated an illegal search monopoly.
It has also faced EU enforcement action, including a €2.4bn (£2bn) fine for allegedly “self-preferencing” its Shopping comparison service in results – a penalty upheld by the bloc’s top court last year.
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