The UK's Competition and Markets Authority (CMA) has officially designated Google with "strategic market status" (SMS) in the online search and search advertising market, a move that could lead to stricter regulations for the tech giant. This designation, the first of its kind under the UK's new digital markets regime that took effect in January 2025, grants the CMA enhanced powers to impose conduct requirements on companies with entrenched market dominance in strategically important digital sectors.
The CMA's decision follows a nine-month investigation that concluded Google possesses "substantial and entrenched market power" in general search and search advertising. According to the CMA, Google accounts for over 90% of online searches in the UK. More than 200,000 businesses in the UK rely on Google search advertising to reach customers. The regulator also found that search advertising spending nearly doubled from £8 billion in 2019 to £15 billion in 2023.
The CMA's investigation assessed several dimensions of Google's market position. The CMA highlighted how Google's position across multiple access points reinforces its market power and that Google's default search agreements create barriers to competition. These arrangements span major browsers, mobile operating systems, and device manufacturers.
While the "strategic market status" designation doesn't imply any wrongdoing, it empowers the CMA to consider "proportionate, targeted" measures to ensure general search services are open to effective competition and that consumers and businesses are treated fairly. The CMA said it expects to consult on potential interventions later this year. The watchdog has previously outlined possible remedies, including giving users "choice screens" for rival search services when they use products like the Chrome browser and Android mobile operating system. Another proposal is forcing Google to make search results ranking and presentation fair and non-discriminatory, and give businesses an effective way to complain if they've been treated unfairly.
Google, for its part, anticipates interventions to ensue. Oliver Bethell, Google's senior director for competition, warned against "unduly onerous regulations" and urged Britain to learn from "negative results seen in other jurisdictions," referencing the EU's digital regulations. Bethell argued that many of the potential interventions raised during the CMA's investigation would "inhibit UK innovation and growth, potentially slowing product launches" and pose "direct harm" to businesses. Google also stated that unfavorable regulation could slow the launch of new product launches in the UK.
The CMA's action underscores the UK's determination to take a more assertive role in policing the dominance of Big Tech platforms. Under the new regulatory framework, companies designated with "strategic market status" can face legally binding rules requiring them to operate in ways that promote competition and transparency — with fines of up to 10% of global turnover for violations.
The designation encompasses Google Search accessed through any medium, including all information returned through its underlying infrastructure. This includes generative AI features such as AI Overviews and AI Mode, other features presented on the search engine results page such as specialized search units, videos and maps, and the Top Stories carousel. However, Google's AI assistant Gemini was not included in the designation but would be kept under review.
The CMA's investigation documented how Google's position across multiple access points reinforces its market power. The designation affects approximately 68 million UK internet users who regularly access search services. The CMA noted that in 2024, Google's search services reached nearly every UK household and business.
The CMA's next steps involve consulting on potential interventions later this year. This will likely involve discussions with Google, other industry players, and the public to determine the most appropriate and effective measures to address the CMA's concerns about competition in the search and search advertising market.
