Google targeted in the CMA’s first ever strategic market status investigation

The CMA has launched its first ever strategic market status investigation, with Google’s search and search advertising services under the microscope. The CMA has nine months to decide whether Google should be designated as having strategic market status.  If it does so, the CMA will also consider whether - and what - measures to impose to protect competition.

On 14 January 2024, the CMA announced its investigation into Google’s general search and search advertising services (“general search services”) under the new digital markets regime introduced by the Digital Markets, Competition and Consumers Act 2024 (“DMCCA”). The CMA will in parallel decide both whether Google has strategic market status in general search services and, if so, whether to impose measures on Google to protect competition, consumers and/or businesses.

Why is the CMA investigating Google?

The CMA considers search to be ‘vital for economic growth’ and a ‘key digital service’ for people, businesses and the economy, and has found that search advertising costs UK businesses an amount equivalent to nearly £500 per household per year, with more than 200,000 UK advertisers using Google’s search advertising.

The CMA has identified reasonable grounds to consider that it may be able to designate Google as having strategic market status in general search services, including as a result of its 2020 market study into online platforms and digital advertising which identified that (among other factors) Google has accounted for more than 90% of UK search advertising revenues for at least 10 years.

What is the focus of the CMA’s investigation?

The CMA will assess whether Google has “strategic market status” which will depend on Google’s position in the UK market and the strategic significance of its general search services.

The CMA has said that its investigation will explore three broad issues:

  1. Weak competition and barriers to entry and innovation in search: whether there is effective competition, and if Google can use its position in general search services to prevent innovation or potential competitors from entering the market. In particular, the CMA will assess whether Google is able to limit the competitive constraint imposed on its search services by new AI services.
  2. Possible leveraging of market power and ensuring open markets: whether Google is able to use its search services to favour its own products and services over those of its competitors, such as by giving special prominence to results from its own search services.
  3. Potential exploitative conduct: whether Google collects and uses large quantities of consumer data without informed consent and if it uses publisher content without fair terms and conditions (including payment terms).

What happens if Google is designated as having strategic market status?

If Google is found to have strategic market status the CMA can introduce restrictions or requirements on its conduct. The CMA has set out a number of potential measures it intends to consider in parallel to its investigation into Google’s strategic market status, including requirements:

  1. to give competitors access to key data (e.g. web index and/or click and query data) to improve the quality of competing search results and/or enable the development of innovative new AI search services to compete with Google;
  2. restricting Google’s ability to enter into revenue-sharing and placement agreements with third parties;
  3. preventing Google from giving greater prominence to its own search services results compared to those of its competitors; and
  4. to ensure that search rankings do not discriminate against firms which choose not to purchase Google-owned services or assist regulators with investigations into Google. In addition, measures could be put in place to give consumers more control over their data and ensure that publishers are offered fair terms for the use of their content.

The CMA has the ability to impose measures at the same time as (or shortly after) designating a firm as having strategic market status (as a “conduct requirement”), or at a later date following a pro-competition intervention investigation that identifies an adverse effect on competition (a “pro-competition intervention”).

Breach of conduct requirements or pro-competition interventions can lead to heavy penalties, with fines of up to 10% of the firm’s global turnover. Any person or organisation affected by the breach can also bring civil proceedings for damages or enforcement.

What are the next steps in the investigation?

The CMA must publish a final decision on whether Google should be designated as having strategic market status within nine months (13 October 2025). Throughout its investigation, the CMA will directly engage with Google and key market participants (such as advertising firms, news publishers, and user groups) and consult on its provisional views.

Stage 1 of the CMA’s engagement process includes an invitation to comment, which invites initial views from the public by 3 February 2025.

Stage 2, expected to commence in April 2025, will see the CMA preparing for the publication and consultation of its proposed decision on whether to designate Google with strategic market status and any proposed initial conduct requirements.

Finally, in Stage 3, Google will have a further opportunity to make representations on the CMA’s proposed decision.

What can we expect going forwards?

This high-profile investigation marks the CMA’s first use of its extensive new digital markets powers but it is not expected to remain its only strategic market status investigation for long. The CMA has said that it expects to launch investigations in three areas of digital activity over the first 6 months, the first two of which will be announced in January. We can therefore expect the regulator to announce its second investigation imminently.

Hausfeld is recognised for its groundbreaking abuse of dominance litigation against Big Tech, including Google. For more information visit our Digital Markets hub.