The United Kingdom is attempting to navigate a delicate balancing act with its new regulatory action against Google, trying to implement pro-competition rules without stifling the pro-innovation environment it wants to cultivate. The clash between the Competition and Market Authority’s (CMA) goals and Google’s warnings highlights this inherent tension.
On one hand, the UK government has a stated ambition to be a global “tech and science superpower.” This requires creating an environment where major companies like Google feel confident to invest, research, and launch their latest products. Google’s warning that the CMA’s interventions could “inhibit UK innovation and growth” is a direct appeal to this ambition, suggesting that heavy-handed regulation could make the UK a less attractive market.
On the other hand, a core tenet of economic policy is that genuine, long-term innovation flourishes in a competitive market. The CMA’s position reflects this belief. By designating Google with “strategic market status” and proposing measures to open up the market, the regulator is arguing that true innovation is being stifled by Google’s monopoly, and that more competition will ultimately lead to more, not less, progress.
This puts the UK in a challenging position. It wants to rein in the power of Big Tech to ensure a level playing field for smaller UK businesses and startups. Yet, it does not want to create a regulatory environment so burdensome that those same Big Tech companies decide to deprioritize the UK market for new product launches, especially in a critical field like AI.
The final rules that emerge from the CMA’s consultation will be a crucial test of this balancing act. The goal will be to craft remedies that are targeted and effective enough to increase competition without creating unintended negative consequences for the UK’s broader technology goals.