Google is now entering a new era of accountability in the UK, where it will have to answer directly to a powerful national regulator for its business practices. The “strategic market status” designation by the Competition and Market Authority (CMA) means the company can no longer operate with the same degree of autonomy it has enjoyed for years.
Previously, Google was primarily accountable to its shareholders (to maximize profit) and its users (to keep them from switching). However, with over 90% of the search market, the threat of users switching has been minimal. The new designation introduces a powerful third party to which Google is now accountable: the CMA.
This new accountability is proactive and ongoing. The CMA will set “conduct requirements”—a list of dos and don’ts—that Google must follow. These could cover everything from how it ranks results to how it uses publisher content. Google will have to be able to demonstrate to the CMA that it is complying with these rules on a continuous basis.
This creates a new power dynamic. If competitors or publishers believe Google is acting unfairly, they now have a dedicated and empowered regulator to appeal to. The CMA can investigate these claims and, if necessary, take enforcement action, including imposing massive fines.
For a company accustomed to setting its own rules, this represents a profound shift. It is now subject to a new layer of governance and will have to justify its strategic decisions not just in terms of business logic, but in terms of compliance with a UK-specific regulatory framework.