Google is encountering mandatory changes in its search operations within the UK, following the competition regulator’s decision to grant the company special status and impose stricter regulations.

The Competition and Markets Authority (CMA) has confirmed that Google holds a “strategic market position” (SMS) in both search and search advertising. This classification indicates that the company wields sufficient market power to necessitate a unique regulatory framework.

The regulator now has the authority to mandate alterations in how Google conducts business in these sectors, as per new digital legislation. This announcement on Friday marks the first time a tech company has been recognized with an SMS designation.

The CMA has already indicated several potential changes, such as providing internet users with the option to select a different search service through a “choice screen.” This could include AI-driven competitors like Perplexity and ChatGPT among the available options.

The CMA is also looking to ensure equitable ranking of search results and to provide publishers with greater control over the usage of their content, including responses generated by AI. Features such as AI Overview and AI Mode powered by Google’s AI are also included under the SMS classification.

The CMA clarified that its ruling does not imply any wrongdoing and that no immediate actions will be enforced. However, this year it intends to initiate discussions regarding potential alterations to Google’s operations.

Will Hayter, executive director of digital markets at the CMA, asserted that enhancing competition in realms like search and search advertising—which involves advertisers paying to appear in users’ search results—could foster new business opportunities and stimulate investment throughout the UK economy.

He stated: “Over 90% of searches in the UK are executed on Google’s platform, underscoring Google’s continued strategic role in search and search advertising.” He added, “In response to the feedback we received post our proposed decision, we have today designated Google’s search service with a strategic market position.”

Oliver Bethel, Google’s senior director of competition, expressed concerns that this decision might jeopardize UK users’ access to emerging products and services.

He commented: “Several of the intervention ideas proposed in this process could hinder innovation and growth in the UK, potentially delaying product introductions at a time when AI-based advancements are rapidly progressing.”

Tom Smith, a competition lawyer at Geradin Partners and former CMA legal director, noted that there is a substantial case against Google.

He remarked: “There exists a clear basis for eliminating some of the market distortions caused by Google’s monopolistic stance. This has already been addressed in the US and EU. Today’s ruling empowers the CMA to take similar action.”

In a separate inquiry, the CMA is evaluating whether Google’s and Apple’s mobile platforms should be classified as SMS-enabled under the newly established digital regulatory framework outlined in the Digital Markets, Competition and Consumers Act 2024.