The UK’s Competition and Markets Authority (CMA) has initiated a significant investigation into Google’s search services, leveraging new powers under the recently enacted Digital Markets, Competition and Consumers Act (DMCC).
This marks the first major inquiry under the new regime, which came into effect on January 1, 2025. The CMA’s focus will be on assessing Google’s dominance in the UK search market and its potential designation as having Strategic Market Status (SMS).
Context and Significance of the Investigation
Google currently dominates over 90% of general search queries in the UK, with more than 200,000 businesses relying on its search advertising services. Search plays a pivotal role in economic growth by connecting businesses, investors, and consumers while generating data critical for innovation. CMA Chief Executive Sarah Cardell emphasized the importance of ensuring competition in search services, stating:
“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.”
Key Concerns Highlighted by the CMA
The CMA has identified several critical areas of concern:
- Barriers to Entry and Innovation: The investigation will examine whether Google’s market position limits competition by creating obstacles for rivals, particularly in emerging AI-driven search technologies and interfaces.
- Market Power and Self-Preferencing: There is concern that Google may use its dominance to favor its own specialized services, such as those for shopping or travel, over competitors.
- Data Exploitation: The CMA will probe whether Google collects and uses consumer data without adequate consent and whether it offers fair terms to publishers for the use of their content.
Potential Outcomes and Regulatory Actions
If Google is designated as having SMS, the CMA could impose measures to curb anti-competitive behavior, such as:
- Requiring Google to share its data with competitors.
- Mandating greater transparency in how publishers’ content is used in Google’s AI services.
- Implementing changes to promote a more level playing field for competitors and businesses.
The investigation, which is set to conclude by October 2025, aims to engage a wide range of stakeholders, including advertisers, news publishers, user groups, and Google itself.
Broader Implications
This inquiry mirrors similar actions in the United States, where the Department of Justice has sought to break up parts of Google’s operations, such as its Chrome browser, to address its monopoly in search. Both regulatory bodies are addressing concerns that Google’s dominance may stifle innovation and reduce consumer choice.
Google’s Response
In response to the CMA’s investigation, a Google spokesperson acknowledged the company’s role in supporting UK businesses and committed to constructive engagement. They emphasized the need for a “pro-innovation, evidence-based regime” and cautioned against overly prescriptive competition rules that could inadvertently limit opportunities for consumers and businesses.
Looking Ahead
The CMA’s investigation underscores the growing scrutiny of big tech companies’ market power, particularly as AI reshapes the digital landscape. The outcomes of this probe could set significant precedents for regulating digital markets and ensuring fair competition in the UK and beyond.
