Google Faces CMA's First-Ever Digital Markets Probe Amid Rising Competition Concerns

Alphabet's Google is currently under the scrutiny of the UK's Competition and Markets Authority (CMA) as it faces its inaugural investigation under the newly enforced digital markets competition regime. This investigation, which aims to last approximately nine months, will delve into Google's strategic market status, particularly focusing on its influence in the search and search advertising sectors. The probe will evaluate how Google's dominant position impacts consumers, businesses such as advertisers and news publishers, as well as competing search engines.

The new digital markets competition rules, effective January 1, 2025, grant the CMA substantial powers, including the ability to demand information, impose significant fines, and implement measures aimed at enhancing competition. The CMA emphasized in its statement that it will analyze whether Google has been leveraging its market position to stifle innovation from other players in the industry.

This investigation is part of a wave of high-profile inquiries by global regulators targeting the market dominance of tech giants. Concurrently, Google is contending with demands from US regulators to divest its Chrome browser. In response, a Google spokesperson highlighted the company's role in fostering growth for millions of UK businesses through innovative search solutions, and expressed Google's commitment to working constructively with the CMA to ensure the new regulations benefit a diverse range of websites.

Under the digital markets competition framework, the CMA has the authority to impose behavioral requirements on Google, such as mandating the sharing of data with other companies or granting publishers more control over the utilization of their data. According to CMA data, Google commands over 90% of the UK's online search query market shares.

The inquiry will also investigate whether Google has engaged in anti-competitive practices affecting the development of new AI services, such as "answer engines," and if it has been prioritizing its own services, like shopping and travel, over others via its market position. This is set against a backdrop of shifting market dynamics, as reports indicate Google's search engine market share recently dipped below 90% for the first time since early 2015, suggesting potential challenges to its long-standing dominance.