While much of the focus has been on Google Search, the lucrative world of search advertising is at the heart of the UK’s move to regulate the tech giant. The Competition and Market Authority (CMA) has confirmed that its “strategic market status” designation applies equally to Google’s search and search advertising businesses, targeting the core of its revenue model.
The CMA’s executive director, Will Hayter, specifically mentioned the importance of promoting competition in “search and search advertising – where advertisers pay to place an advert in a user’s search result.” This highlights the regulator’s concern that Google’s dominance in search gives it an unassailable position in the digital advertising market, which can harm both advertisers and consumers.
With over 90% of searches, Google controls the primary gateway for businesses to reach customers online. This allows it to dictate the terms and prices of search advertising, a market worth billions of pounds annually in the UK. A lack of competition means advertisers may face higher costs, which can be passed on to consumers in the form of higher prices for goods and services.
The potential remedies being considered by the CMA could have a direct impact on this market. For instance, if “choice screens” lead to a significant number of users switching to rival search engines like DuckDuckGo or Bing, it would fragment the market and create more competition for advertising pounds. Rules on fair ranking could also prevent Google from giving its own shopping ads preferential treatment.
By targeting both search and search advertising, the CMA is aiming for a comprehensive overhaul of the ecosystem. The goal is to create a more competitive environment that benefits not just users looking for information, but also the thousands of UK businesses that rely on digital advertising to grow.
