Key Takeaways
On Tuesday, Jan. 14, the U.K.’s Competition and Markets Authority (CMA) opened an investigation into Google’s dominant position in web search and search advertising.
This is the first probe under a new digital markets competition regime that came into force on Jan. 1. The investigation will determine whether Google should be designated as having “strategic market status” (SMS), potentially warranting the regulator’s interventions to enhance competition.
It should come as little surprise that Google’s search dominance is the first candidate for an SMS designation under the UK’s new digital markets competition regime.
In August 2024, Judge Amit P. Mehta’s landmark ruling that the firm engaged in anticompetitive business practices in the search market formed one of the most decisive antitrust charges of the modern era.
While the ultimate remedies in the American case are still being negotiated, the CMA’s probe will further pressure Google to overhaul its search business.
If the regulator’s 9-month investigation identifies uncompetitive conduct, the SMS designation will allow it to force Google to adjust its conduct.
Much like the EU’s Digital Markets Act, the new antitrust regime was designed specifically with Big Tech platform operators in mind. It is likely that Google, Apple, Amazon, and Microsoft will all receive one or more SMS designations in the coming months and years.
With its similarly dominant positions in AdTech, mobile operating systems, and app marketplaces, Google could well receive multiple such designations.
In the U.S., prosecutors working on both the search case and a parallel case relating to digital advertising have suggested that Google may need to spin off parts of its business to assuage antitrust concerns.
However, many less drastic measures could also be taken to weaken Google’s market control in both areas.
In a press release announcing the latest investigation, the CMA suggested potential solutions to Google’s search dominance. These include requiring the firm to make the data it collects from users available to other businesses and giving publishers more control over how their data is used.
Between the U.S. litigation, competition probes in the U.K. and a suite of parallel investigations in the EU, some kind of change to Google’s search business now seems inevitable.