Investigation to determine Google’s market status and impact on the UK
The Competition and Markets Authority (CMA) has officially initiated its first strategic market status (SMS) designation investigation under the newly implemented digital markets competition regime, effective from 1 January 2025. This inquiry aims to evaluate Google’s dominance in search and search advertising services and its effects on various stakeholders, including consumers, advertisers, news publishers, and competing search engines.
Google’s innovative search services have significantly benefited the UK by serving as a primary gateway for millions of users to access and explore the internet. Currently, Google handles over 90% of all general search queries in the UK, and more than 200,000 UK advertisers rely on its search advertising platform. The search ecosystem plays a critical role in driving economic growth by enabling businesses to connect with partners, investors, and customers, while also generating data that fuels the development of new AI-driven products and services.
Given the essential role of search in the digital economy, ensuring robust competition is crucial. Healthy competition fosters greater choice, innovation, and consumer control over personal data. Additionally, search services are vital for news accessibility, making it imperative that publishers receive fair treatment for the use of their content. Effective competition could enhance content diversity and fairness in publisher compensation.
From a business perspective, competition in search advertising can help control costs—estimated to be equivalent to nearly £500 per household annually—thereby lowering prices across various sectors. A competitive market environment could also stimulate innovation, creating opportunities for new entrants, including AI start-ups, to compete fairly with established players like Google.
Scope of the investigation
Under the digital markets competition framework, the CMA can assign SMS status to firms engaged in specific digital activities. If Google is designated with SMS, the CMA may impose behavioral requirements or recommend pro-competition measures to benefit UK consumers and businesses.
Key issues under investigation include:
- Competition and Innovation Barriers The CMA will evaluate whether Google’s market dominance hinders competition and innovation, particularly regarding new entrants. This includes assessing whether Google’s influence over AI-driven services and interfaces, such as ‘answer engines’, limits competition.
- Market Power and Open Market Access The investigation will explore whether Google leverages its dominant position to favor its own specialized search services, such as those related to shopping and travel, thereby disadvantaging competitors.
- Potential Exploitative Practices The CMA will examine whether Google collects and utilizes large volumes of user data without proper consent and whether publishers face unfair terms regarding the use of their content, including remuneration.
Potential regulatory measures could involve mandating Google to share collected data with other businesses or granting publishers increased control over how their content is used, including in Google’s AI services.
Investigation timeline and approach
The CMA has committed to a proportionate and transparent investigation process, with a completion deadline of nine months. The next phase involves extensive engagement with key stakeholders—including advertisers, news publishers, and user groups—and gathering evidence from Google. The CMA aims to reach a final decision by October 2025.
CMA Chief Executive Sarah Cardell said: “Millions of people and businesses across the UK rely on Google’s search and advertising services – with 90 per cent of searches happening on their platform and more than 200,000 UK businesses advertising there. That’s why it’s so important to ensure these services are delivering good outcomes for people and businesses and that there is a level playing field, especially as AI has the potential to transform search services.
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. And for businesses, whether you are a rival search engine, an advertiser or a news organisation, we want to ensure there is a level playing field for all businesses, large and small, to succeed”. Photo by brionv, Wikimedia commons.