The new digital markets competition regime came into effect on 1 January 2025, and the Competition and Markets Authority (CMA) has already launched its first investigation into Google under its newly granted powers.

Under this regime, the CMA has the authority to designate certain businesses as having Strategic Market Status (SMS)for specific digital activities. Once a company is designated, the CMA can impose conduct requirements or recommend pro-competition interventions to benefit UK consumers and businesses.

CMA’s first SMS investigation: Google

The designation process can only occur following an investigation. The CMA has confirmed that its initial SMS investigation will focus on Google’s role in search and search advertising services.

According to CMA data, Google handles over 90% of general search queries in the UK, with more than 200,000 UK advertisers relying on its search advertising services.

Search is a critical digital service, as many businesses depend on internet searches to connect with potential customers. The CMA estimates that improving competition in this area could lower the costs associated with search advertising.

Key areas of investigation

The CMA’s investigation will examine several aspects of Google’s operations, including:

  • Competition dynamics: Assessing how competition currently functions in search and search advertising services.
  • Market dominance: Investigating whether Google uses its dominant position to stifle innovation.
  • Self-preferencing: Evaluating whether Google favours its own services over competitors.
  • Consumer data and publisher content: Scrutinising whether Google’s use of consumer data and publisher content involves potentially exploitative practices.

Next steps

The CMA is required to complete its investigation within 9 months, at which point it will announce its findings and any potential conduct requirements.

This investigation represents a significant step under the new digital markets competition regime, aiming to ensure fair competition and protect businesses and consumers.

For more details, visit: SMS Investigation into Google.