The UK’s Competition and Markets Authority has completed legal tests and consultations to establish Google’s ‘strategic market status’: next job, what to do about it?
The UK’s Competition and Markets Authority (CMA) has confirmed that legal tests have been met to designate Google with strategic market status in general search and search advertising services.
Google became the dominant search mechanism in many countries including the UK, more than two decades ago – the CMA has established, inter alia, that more than 90% of searches in the UK taking place on its platform. Now after 10 months of legal tests and consulting more than 80 parties to establish that Google has all that market power, the regulator will begin consulting on possible interventions later in the year.
The CMA is flexing its new muscles:the UK’s new digital markets competition regime came into force on 1 January 2025. It means the CMA can take “targeted and proportionate action to improve competition in digital markets, helping to drive innovation, investment and growth across the UK economy”.
The British describe taking too little action too late as being like “shutting the stable door after the horse has bolted” – a saying that dates back to the seventeenth century and Charles II yet still has application today.
Back to 2025. The CMA stresses that designating Google with strategic market status “is not a finding of wrongdoing and does not introduce any immediate requirements”.
The CMA launched an investigation into Google’s general search and search advertising services on 14 January and consulted on its proposed decision in June that Google should be designated with strategic market status.
Will Hayter, Executive Director for Digital Markets at the CMA, said, “By promoting competition in digital markets like search and search advertising we can unlock opportunities for businesses big and small to support innovation and growth, driving investment across the UK economy.”
There are big shifts in the market: people are fed up with what Cory Doctorow calls the “enshittification” of online experiences including search. They are turning to AI and of course the only trouble with that is that the usual suspects own or fund some of the biggest models. It will be interesting to see how long it takes the CMA to get its head round that.
In Google’s view
Google’s response could be summed up as “regulate us at your cost”, in a statement by Oliver Bethell Senior Director, Competition, Google:
“Today the CMA designated Google Search with Strategic Market Status under the UK’s new digital markets regime. Next, we will likely face new rules and regulations on how Search works.
“To date, UK businesses and consumers have been amongst the first to benefit from Google’s innovations, often months before their European counterparts. As a result, they see significant value: Google Search contributes billions of pounds a year to the UK economy — £118 billion in 2023 alone.Â
“The UK enjoys access to the latest products and services before other countries because it has so far avoided costly restrictions on popular services, such as Search. Retaining this position means avoiding unduly onerous regulations and learning from the negative results seen in other jurisdictions, which have cost businesses an estimated €114 billion.
“Many of the ideas for interventions that have been raised in this process would inhibit UK innovation and growth, potentially slowing product launches at a time of profound AI-based innovation. Others pose direct harm to businesses, with some warning that they may be forced to raise prices for customers.”
Google supports the CMA’s goal to ensure the UK’s competition framework mirrors the best interests of UK consumers and businesses. We hope to see outcomes that reflect such ambitions in the crucial months ahead.
