The UK’s competition watchdog has stated that Google might need to alter its practices in order to provide consumers with more options for online search services. Under a new law, the Competition and Markets Authority (CMA) has the power to demand changes from companies that hold too much power in a specific market. Google currently accounts for over 90% of searches in the UK and 200,000 businesses use its search advertising services. Alphabet, Google’s parent company, has stated that the CMA’s suggestions are too broad and unfocused, but they will cooperate with the regulator. The CMA has not accused Google of anti-competitive behavior at this time, but has outlined potential changes that could be made to the company’s business before making a final decision in October. These changes could include implementing “choice” screens for users to access different search providers, as well as providing more transparency and control for publishers whose content appears in search results. The CMA has stated that the average person in the UK makes 5-10 searches per day and businesses spend an average of £33,000 per year on Google advertisements, but if competition were working effectively, these figures could be lower. CMA chief executive Sarah Cardell stated that Google’s search services have provided significant benefits, but their investigation has revealed ways to make the market more open, competitive, and innovative. She added that the proposed changes would give UK businesses and consumers more choice and control over how they use Google’s search services. However, Google has expressed concern over the potential impact of the investigation and the suggested changes on businesses and consumers in the UK. They stated that the CMA’s announcement presents clear challenges to their business and that the UK has historically benefited from early access to Google’s innovations, but this could change due to “punitive regulations.” The CMA launched its investigation into Google in January, stating that they aim to ensure fair competition in online search. 47 organizations, including airlines, adult online retailers, and media publishers, have provided details on how Google’s search practices have either helped or hindered them. For example, EasyJet stated that changes made by Google in the European Union as a result of the Digital Markets Act have sent more customers to online travel agencies and aggregators, resulting in misrepresented services and prices. Google has stated that boosting the visibility of rival search engines and comparison sites was necessary to comply with the EU’s Digital Markets Act, but this change has negatively impacted airlines and hotel operators who have lost direct traffic. Additionally, LoveHoney and Ann Summers, both retailers of sex toys and related products, have stated that Google’s SafeSearch feature, which censors explicit results, has affected the discoverability of their websites through Google’s search engine. Trade association UK Hospitality has suggested that the UK should avoid following in the EU’s footsteps with search requirements that could have unintended consequences for businesses and consumers. The CMA’s intervention could also have significant implications for artificial intelligence (AI) powered search alternatives, such as Google’s AI Overviews, according to Sebastian Cuttill of the News Media Association. He stated that increasing transparency over the use of news content in such services would be massive for publishers. News organizations, including the BBC, have expressed concerns over the use of their content without consent or compensation in the development of tech companies’ AI tools. Mr. Cuttill believes that this measure would promote fair dealing and trust and transparency. Google’s search operations have also faced increased scrutiny from regulators in other countries. In August 2020, a US judge ruled that the company had operated an illegal search monopoly. The company has also faced enforcement action from the EU, including a €2.4bn fine for allegedly favoring its Shopping comparison service in search results, a penalty that was upheld by the EU’s top court last year. Sign up for our flagship newsletter to start your day with all the top headlines.
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