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The UK’s competition watchdog has opened an investigation into Google to determine if its position in search services should warrant a special status for the US technology giant, which could see it bound by tougher conduct rules.
The Competition and Markets Authority said on Tuesday it would look at whether Alphabet-owned Google’s position in search and advertising activities “are delivering good outcomes for people and businesses in the UK”.
The investigation is the first under the new digital markets competition regime that came into force this month. As a result of the new rules, the CMA will decide whether a small group of companies should be handed “strategic market status” and forced to abide by certain rules based on their size and influence in key digital markets.
The CMA’s probe is the latest regulatory setback for Google. In November, the US Department of Justice said it was seeking to force the tech giant to divest its Chrome browser in a move aimed at curbing Google’s power over online search.
Google said its search service “supports millions of UK businesses to grow by reaching customers in innovative ways” and that the company would “engage constructively with the CMA to ensure that new rules benefit all types of websites”.
The CMA said it would review Google’s position in search services and look at how it impacts consumers, businesses, news publishers and rival search engines. Google accounts for more than 90 per cent of all general search queries in the UK and more than 200,000 UK advertisers use Google’s search advertising, the CMA said.
Under the new digital markets regime, which forms part of the UK’s Digital Markets, Competition and Consumers Act that passed into law last year, certain Big Tech companies deemed to have an outsized impact in some digital activities will be SMS designated and forced to abide by conduct requirements or pro-competition interventions.
The regime is designed to promote competition and protect consumers from potentially harmful practices by the largest companies.
“It’s our job to ensure people get the full benefit of choice and innovation in search services and get a fair deal — for example, in how their data is collected and stored,” said CMA chief executive Sarah Cardell. “We want to ensure there is a level playing field for all businesses, large and small, to succeed.”
The regulator said it would investigate whether Google was using its position to prevent innovation by competitors, specifically in relation to artificial intelligence, and to give preference to its own services, as well as how it uses consumer data and publisher content.
The CMA will have nine months to determine if Google should be designated a SMS company and has said it will publish any conduct requirements at the same time. Potential conduct requirements could include forcing Google to make the data it collects available to other businesses or giving publishers more control over how their data is used, the agency said.
A company is deemed to have SMS if it has UK turnover of more than £1bn or global turnover of more than £25bn, “substantial and entrenched” market power in the digital activity, and a position of strategic significance. The status lasts for a five-year period and SMS companies can be fined up to 10 per cent of global turnover for breaching conduct rules.
The agency said this month that it would announce investigations into two digital activities in January, with a third set to start in the spring.
Additional reporting by Tim Bradshaw
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