The UK’s Competition and Markets Authority (CMA) has launched an investigation into Google’s dominance in the search and search advertising markets, marking the first strategic market status (SMS) designation investigation under the new digital markets competition regime.
CMA Investigates Google’s Search Services
The investigation, announced on January 14, 2025, aims to determine whether Google has strategic market status in search and search advertising activities and whether these services are delivering good outcomes for people and businesses in the UK.
This move is part of the CMA’s new digital markets competition regime, which came into effect on January 1, 2025.
Focus Areas of the Investigation
The CMA will assess three main areas: whether Google is posing weak competition and barriers to entry and innovation in search, whether Google gives preference to its own services in areas like advertising and AI, and whether Google is using large quantities of consumer data without informed consent. The investigation will also examine the use of publisher content without fair terms and conditions.
Economic and Industry Impact
Effective competition in the search market is crucial for economic growth, facilitating businesses connecting with each other, investors, and customers.
The CMA notes that effective competition could keep down the costs of search advertising, equivalent to nearly £500 per household per year, which in turn could lower prices across the economy.
Statistics
- Google accounts for over 90% of all general search queries in the UK.
- More than 200,000 UK businesses use Google’s search advertising services.
- The investigation must be completed within a statutory time limit of 9 months.
Leadership Response
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.
Sarah Cardell, Chief Executive of the CMA.
The CMA’s Chief Executive emphasizes the importance of ensuring a level playing field, particularly with the advent of AI transforming search services.
Progress and Targets
- The CMA is in regular contact with other authorities and will engage a wide range of stakeholders, including advertising firms, news publishers, and user groups.
- The investigation will consider potential conduct requirements, such as making data available to other businesses or giving publishers more control over how their data is used.
- The CMA aims to complete the investigation by October 2025.
Local and Sector-Specific Effects
The investigation is particularly significant for UK businesses and consumers, as it could lead to more competitive search services and advertising markets.
For news publishers, it may result in fairer terms and conditions for the use of their content. The CMA’s actions could also stimulate innovation by enabling smaller businesses to compete more effectively.
Immediate Implications
The launch of this investigation signals a proactive approach by the CMA to ensure that digital markets remain competitive and beneficial for all stakeholders. Interested parties have until February 3, 2025, to comment on the investigation.
Broader Significance
This investigation is part of a broader effort to regulate big tech companies and ensure fair competition in digital markets.
It aligns with similar antitrust efforts in other jurisdictions and reflects the growing importance of digital services in the economy.