CMA opens first designation proceeding under new UK digital competition rules

The new digital competition regime was created by the Digital Markets, Competition and Consumers Act 2024 (DMCC Act), which came into force on 1 January this year and is central to the UK government’s efforts to ensure effective competition in digital markets. The investigation (9 pages / 227 KB) is a preliminary step the CMA must take before new digital competition conduct rules can start to apply to specific digital activities of certain technology firms in the UK.

The CMA’s investigation will determine if Google has “strategic market status” (SMS) in search and search advertising digital activities, and whether these services are delivering good outcomes for people and businesses in the UK. During the SMS investigation, the CMA will also consider whether conduct requirements should be imposed on Google in the event that Google does become designated by the CMA as a firm with SMS.

Under the DMCC Act, SMS applies only to firms that have UK turnover of more than £1 billion or global turnover of more than £25 billion annually, a substantial and entrenched market power in a “digital activity” with a significant link to the UK, and a position of “strategic significance” in respect of that digital activity. When a firm is designated by the CMA as having SMS it becomes subject to specific regulatory obligations, which are set out in so-called “conduct requirements” aimed at ensuring fair competition and protecting consumer interest.

Conduct requirements will be tailored for each SMS firm to help address any competition concerns identified by the CMA in respect of specific digital activities of the SMS firm. In the present investigation, the CMA has stated that such conduct requirements “could include, for example, requirements on Google to make the data it collects available to other businesses or giving publishers more control over how their data is used including in Google’s artificial intelligence services”.

The DMCC Act prescribes processes and timeframes the CMA must follow when conducting its SMS designation investigation. This includes that the SMS investigation must be completed within nine months, subject to a possible three-month extension for special reasons. As part of the case timetable, the CMA is inviting public comments on the investigation until 3 February. The CMA’s final SMS designation decision is due by 13 October 2025.

Ahead of launching this first designation procedure under the UK’s digital competition rules, the CMA foreshadowed that it would open SMS designation investigations into three areas of digital activity during the first six months of 2025. The current investigation into Google involves two digital activities: “general search” and “search advertising”. A separate investigation into a third digital activity is expected in the latter stages of the regime’s first six months.

The new digital markets competition regime is the UK’s equivalent of the EU’s Digital Markets Act (DMA). Under the DMA, Google must fully comply with a range of competition-focused conduct rules from March 2024 in respect of eight different “core platform services” it operates in the EU, including general search.

Firms that are designated by the CMA as having SMS are likely to be the same technology firms as those that have been designated as “gatekeepers” under the DMA by the European Commission. These firms may therefore have to comply with two different sets of digital competition rules in respect of their respective UK and EU activities, leading to an increased compliance burden.