The UK has launched an investigation into Google’s search dominance, marking the first major test of the Digital Markets, Competition, and Consumers (DMCC) Act. The Competition and Markets Authority (CMA) will assess whether Google has ‘strategic market status’ (SMS), allowing regulators to impose changes to prevent anti-competitive behaviour. This investigation highlights growing concerns about big tech’s market power. With Google handling over 90% of UK web searches and serving over 200,000 advertisers, the CMA aims to ensure fair competition and innovation. Key Takeaways UK launches investigation into Google’s dominance in search market under new digital competition rules. Google faces probe over alleged self-preferencing of services and misuse of user data without consent. CMA aims to ensure fair competition and innovation, particularly with the rise of AI-powered tools in search technology. The investigation could lead to significant changes for businesses and consumers, including requirements for Google to share user data or provide publishers more oversight. Assessing Google’s role in the search ecosystem The DMCC Act, which came into effect in January 2024, is designed to tackle entrenched market power among digital giants. The CMA’s investigation will determine whether Google’s dominance in search, advertising, and data collection has stifled competition or prevented rivals from entering the market. Sarah Cardell, the CMA’s chief executive, highlighted the importance of ensuring a level playing field, stating that the regulator’s role is to guarantee that people benefit fully from choice and innovation in search services while businesses of all sizes have a fair opportunity to succeed. The investigation is focusing on several critical issues, including allegations of Google self-preferencing its services, potential misuse of user data without proper consent, and obstacles faced by new market entrants, particularly those utilising artificial intelligence (AI) in search technology. Google is willing to co-operate with the CMA while cautioning against overly prescriptive competition rules. The company stated its intention to work constructively with the regulator to ensure that new regulations support all websites and continue to provide helpful services to users. Additionally, Google has emphasised the need for a “pro-innovation, evidence-based regime” that promotes competition without compromising benefits for consumers. Impacts on competition and AI The rise of AI-powered tools, such as OpenAI and Perplexity, has transformed the way users interact with search platforms. However, the CMA is concerned that Google’s dominant position could suppress these innovative players. Ensuring a competitive market is vital for fostering advancements in AI and delivering diverse choices to users. The investigation will also explore whether Google’s AI integrations, such as its use of publisher content, unfairly disadvantage news organisations and content creators. Cardell noted that effective competition in search is essential for fair outcomes in both business and journalism. International context and precedents The UK’s probe is part of a broader global effort to regulate digital markets. In the United States, the Department of Justice (DOJ) is pursuing the divestiture of Google’s Chrome browser, citing its monopoly in search services. The European Union has similarly introduced the Digital Markets Act, targeting anti-competitive behaviour among tech giants. Experts believe the DMCC framework provides the UK with greater flexibility to tailor interventions to specific market dynamics. Pinar Akman, a professor at the University of Leeds, noted that the DMCC Act is a well-considered approach to regulating digital markets and aligns with the global trend of addressing the power of major tech firms. The stakes for businesses and consumers Ensuring fair play for businesses: For businesses, Google’s search platform is both a critical tool and a potential obstacle. Advertisers, news organisations, and smaller search engines rely heavily on its services to reach customers. The CMA’s intervention could lead to significant changes, such as requiring Google to share user data with competitors or providing publishers more oversight of how their content is utilised. Safeguarding consumer choice: The investigation also seeks to protect consumers from potential exploitation, ensuring transparent data collection practices and fostering greater choice in search services. By addressing Google’s dominance, the CMA aims to prevent a monopoly from dictating the evolution of digital markets, particularly as AI becomes increasingly integrated into search technology. The CMA has nine months to assess Google’s practices and decide if regulatory action is needed. If deemed to have SMS, the regulator could impose rules to curb anti-competitive behaviour or make structural changes to promote competition. This case is a test of the UK’s ability to regulate digital markets under the DMCC. With AI reshaping search and increasing scrutiny of big tech, its outcome could influence how governments tackle digital monopolies globally.