Britain’s Competition and Markets Authority (CMA) is investigating Google’s search dominance under the new UK Digital Markets, Competition and Consumers Act to determine its impact on UK news publishers and consumers.
New digital marketing rules kick in
In a first since the new Digital Markets Act came into force on January 1, the UK antitrust regulator has begun investigating Google’s search and ad business, where the company has 90% search market dominance and over 200,000 advertisers.
The Competition and Markets Authority’s (CMA) decision could affect Google’s UK search dominance and reshape its control of search rankings.
What the CMA said
The CMA has said it is assessing Google’s position in advertising and search to determine if the company has “strategic market status” (SMS) under the UK’s new Digital Markets, Competition and Consumers Act (DMCC).
The CMA made this announcement:
- “Will assess Google’s position in search and search advertising services and how this impacts consumers and businesses, including advertisers, news publishers, and rival search engines.”
- “The CMA’s investigation will assess whether Google has SMS [strategic market status] in the UK search and search advertising sectors and, in parallel, consider whether conduct requirements should be imposed in the event of a final designation decision.”
The CMA regulator said it will also assess if Google has been unfairly using publisher content:
- “Without fair terms and conditions (including payment terms),” whether it “is using its position to prevent innovation by others,” by boxing competitors out of the market, and whether the search engine “is using its position in the market to self-preference its own services.”
News Media Association is pleased with the investigation
Chief executive of the News Media Association, Owen Meredith, said they are pleased that the CMA is investigating Google because although Search is critical to the public’s access to news, journalism, services, and businesses, how Google works is opaque.
News Media Association chief executive Owen Meredith wrote:
- “We are very pleased that the CMA has recognized the critical importance of proceeding with an investigation into Google Search as its top priority.
- “Google Search is a critically important gateway for the public to access a huge variety of businesses and services, including trusted news and journalism, which is more important today than ever. Yet, despite its enormous power and the profound impact it can have on other businesses such as news publishers, the workings of Google Search are largely opaque.”
What Google said
Google’s reply to the CMA’s investigation resembles its past statements when government bodies opened investigations into the company’s search and advertising practices, saying:
- “Google looks forward to engaging constructively and laying out how our services benefit UK consumers and also businesses, as well as the trade-offs inherent in any new regulations.”
Google also confirmed it will work with the CMA to ensure everyone benefits under the new Competition and Consumers Act rules:
- “We will continue to engage constructively with the CMA to ensure that new rules benefit all types of websites and still allow people in the U.K. to benefit from helpful and cutting-edge services.”
CMA has 9 months to decide
The CMA has nine months to investigate whether Google should gain strategic market status. It must publish its decision by October 13.
Chief executive of the CMA, Sarah Cardell, said they are gathering evidence from news publishers, advertising firms, user groups, and Google to ensure its services deliver a good outcome for businesses and the UK public:
Sarah Cardell wrote in her statement:
- “Millions of people and businesses across the UK rely on Google’s Search and advertising services—with 90% of searches happening on their platform and more than 200,000 UK businesses advertising there. That’s why it’s so important to ensure these services are delivering good outcomes for people and businesses and that there is a level playing field, especially as AI has the potential to transform search services.”
Cardell also said the CMA will ensure there’s a level playing field where all business sizes can succeed:
- “It’s our job to ensure people get the full benefit of choice and innovation in search services and get a fair deal—for example, in how their data is collected and stored. And for businesses, whether you are a rival search engine, an advertizer, or a news organization, we want to ensure there is a level playing field for all businesses, large and small, to succeed.”
Potential outcome
If the Competition and Markets Authority designates Google as having strategic market status, the company could face strict restrictions on collecting and storing UK user data and running Search. The CMA’s decision could also force Google to alter its algorithms and how it ranks and displays advertisements on Search, potentially affecting visibility and costs.
