LONDON — The Competition and Markets Authority (CMA) of the U.K. has initiated its first investigation under new powers focused on digital markets, targeting Google’s search and advertising operations.
These enhanced regulations, which are aimed at safeguarding both consumers and businesses from unfair practices among major technology companies, came into play earlier this month. The CMA will specifically assess whether Google warrants “strategic market status,” a designation that could necessitate significant alterations to its operations. This inquiry adds to the mounting global scrutiny facing the tech giant.
The CMA’s investigation will delve into whether Google is leveraging its dominant market position to suppress innovation and hinder competitors. A particular area of focus will be Google’s influence over the emergence of new artificial intelligence services and interfaces, like “answer engines,” that may restrict competitive pressures on Google Search.
As AI-driven chatbots gain traction among users seeking online information, Google has adapted its search engine to prioritize AI-generated responses over standard website links, sparking discussions around fairness in digital competition. Google has stated that it intends to cooperate proactively with the CMA to ensure that new regulations serve to benefit a diverse array of websites, while also enabling U.K. users to access advanced services.
Sarah Cardell, the chief executive of the CMA, emphasized the importance of fair competition, particularly in light of AI’s potential to redefine online search. She stated, “It’s our responsibility to ensure individuals receive the full advantages of choice and innovation within search services, and to secure fair deals concerning the collection and usage of their data.” Furthermore, Cardell expressed the CMA’s commitment to fostering a level playing field for all businesses, whether large corporations or smaller enterprises, to thrive.
The CMA will also explore allegations regarding Google’s “exploitative conduct,” which includes the extensive collection of consumer data without proper consent and the utilization of content from website publishers—ranging from major media organizations to niche startups—without appropriate compensation. Additionally, the inquiry will examine whether Google is favoring its own services, such as its specialized shopping and travel search features.
This investigation represents the latest development in a wave of regulatory challenges confronting Google on both sides of the Atlantic. Authorities in the U.S. and Canada have filed lawsuits targeting Google’s advertising operations, accusing the company of monopolistic practices and advocating for a breakup of its business. Meanwhile, regulators in the European Union are conducting their own antitrust investigation, signaling intentions to compel Google to divest portions of its operations in response to concerns about its profitable digital ad segment.
The CMA has until October to complete its investigation, with potential outcomes including mandatory changes to Google’s data handling practices. The authority has indicated plans to launch three to four additional investigations into the strategic market status of other leading tech firms within the first year of implementing these expanded powers.
As the investigation was announced, shares of Alphabet Inc., Google’s parent company, were largely unchanged prior to the opening of the market on Tuesday.
