The UK’s Competition and Markets Authority (CMA) has officially designated Google with strategic market status (SMS) under the new digital markets competition regime. Specifically, it found that Google holds “substantial and entrenched market power and a position of strategic significance” when it comes to general search and search advertising services. The digital markets competition regime came into force on January 1, 2025 and will enable the agency to “promote competition in fast-moving digital markets, while protecting UK consumers and businesses from unfair or harmful practices by the very largest technology firms.”
So what does getting the “strategic market status” designation mean, exactly? As the CMA clarifies, it doesn’t automatically mean Google did something wrong, but it does allow the agency to launch interventions that ensure general search services in the UK are “open to effective competition” and that businesses relying on Google are being treated fairly. The company is expecting to face new rules and regulations on how Search works in the near future. UK’s CMA launched an investigation on Google’s standing in the search industry on January 14 to confirm its status.
“We have found that Google maintains a strategic position in the search and search advertising sector – with more than 90% of searches in the UK taking place on its platform,” said Will Hayter, Executive Director for Digital Markets at the CMA. To be clear, the designation applies to the company’s AI Overviews and AI Mode features, as well, but not to its Gemini AI assistant, at least for now.
The CMA said it’s expecting to start consulting on possible interventions later this year. In an announcement of its own, Google said that “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.” The company believes that some of those ideas would “pose direct harm to businesses” and could lead to higher prices for consumers.
“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,” Google wrote. By “other jurisdictions,” Google means the European Union, whose similar Digital Markets Act law designated the company as a gatekeeper in 2023.
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