The Competition and Markets Authority said it has designated Google with "strategic market status" (SMS), subjecting it to special requirements, in a final decision following a nine-month investigation.
"We have found that Google maintains a strategic position in the search and search advertising sector," Will Hayter, executive director for digital markets at the CMA, said in a statement.
A similar tech competition law from the European Union, the Digital Markets Act (DMA), carries the potential for hefty financial penalties.
The CMA plans to launch a consultation this year to determine the rules to impose on the US tech giant.
Google warned the UK against "unduly onerous regulations" and urged it to learn from "negative results seen in other jurisdictions", referencing the EU's DMA.
"Many of the ideas for interventions that have been raised in this process would inhibit UK innovation and growth," said Oliver Bethell, Google's senior director for competition.
- 'Substantial' power -
Google added Friday that unfavourable regulation could slow the launch of new product launches in the UK.
The company last month announced a �5-billion ($6.6-billion) investment in the UK over the next two years to help power the UK's AI drive.
"The UK enjoys access to the latest products and services before other countries because it has so far avoided costly restrictions on popular services," Bethell said.
The regulator noted that Google's Gemini AI assistant was not included in the designation but would be kept under review.
Its other AI-based search features will, however, be included in the new status.
Britain's CMA launched in January its investigation into Google's dominant position in the search engine market and its impacts on consumers and businesses.
It determined Friday that Google has "substantial and entrenched market power".
Google search engine accounts for more than 90 percent of online enquiries in the UK, according to the regulator.
The CMA added that more than 200,000 businesses in the UK rely on Google search advertising to reach customers.
"For businesses, effective competition in general search would help keep down the costs of search advertising, in turn leading to lower prices across the economy," the CMA said.
Google, along with Apple, also faces an investigation to determine whether it will be given SMS designation for dominance in the mobile device market.
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