Competition watchdog launches strategic investigation into Google Search dominance
UK's CMA to assess Google Search market power and potential new rules under Digital Markets Act as search advertising hits £15bn.
According to documents released today by the Competition and Markets Authority (CMA), the UK regulator has initiated a formal investigation into Google's Search and search advertising services under new digital market powers. The announcement marks the first major tech investigation since the Digital Markets, Competition and Consumers Act 2024 came into force.
The CMA's investigation, launched on January 14, 2025, will examine whether Google meets the criteria for "Strategic Market Status" (SMS) designation - a classification that would subject the company to new regulatory requirements aimed at promoting competition in digital markets.
Data from the CMA shows Google currently accounts for more than 90% of all general search queries in the UK. The regulator notes that search advertising spending has nearly doubled from £8 billion in 2019 to £15 billion in 2023, while Google has maintained its dominant market position.
According to the investigation notice, the CMA will assess several key aspects of Google's operations, including potential barriers to competition in both general and specialized search, as well as emerging AI-powered search alternatives. The investigation will specifically examine whether Google leverages its market power to disadvantage rivals or exploit users.
The regulator's analysis identifies multiple factors potentially reinforcing Google's position, including network effects from user data collection, economies of scale in web indexing infrastructure, and control over key access points through default search agreements. Internal CMA estimates indicate the cost of search advertising now equates to nearly £500 annually per UK household.
Professor Thomas Höppner, Competition Law expert at Hausfeld, notes that "Despite all the red herrings about AI disruptions, Google still operates the most central online platform to match supply and demand – to its own advantage. With rising ad spending but dropping performance, AI overviews being rolled out in the UK and no signs of compliance with antitrust laws, it was only consequential that the CMA would prioritize Google."
The investigation comes as artificial intelligence transforms search technology. The CMA documents highlight Google's integration of AI features like "overviews" that generate direct responses to queries, and its Gemini AI assistant that "taps into Google search results." The regulator will examine whether these innovations could further entrench Google's market position.
In response to the investigation, Google's Director of Competition Oliver Bethell stated that Google Search helped provide an estimated £118 billion in economic activity in 2023 in the UK, supporting over a million businesses. Bethell emphasized that "Search also helps millions of British businesses to grow and reach customers in innovative ways."
The CMA investigation aligns with parallel developments in other jurisdictions. In the European Union, Google was designated as a "gatekeeper" under the Digital Markets Act for both search and advertising services. In the United States, a District Court ruled in August 2024 that Google had monopoly power in general search and search text advertising.
The regulator will explore potential interventions including requirements for Google to:
- Make key data like web indexes available to competitors
- Prevent preferential treatment of Google's own specialized search services
- Ensure fair terms for publishers whose content appears in search results
- Implement effective complaint processes for businesses affected by search rankings
- Give users more control over their search data
The CMA has set a deadline of February 3, 2025, for stakeholders to submit evidence and comments. Under statutory requirements, the regulator must complete its investigation within nine months, though extensions are possible in specific circumstances.
Stakeholders can provide input through the CMA's online consultation portal or by email. The regulator emphasizes that submissions should focus on evidence rather than opinion, particularly welcoming quantitative data on market dynamics and user behavior.