UK CMA Grants Google “Strategic Market Status” in Search Ads

On October 10, 2025, the UK’s Competition and Markets Authority (CMA) officially designated Google as holding “Strategic Market Status” (SMS) in general search and search advertising services. This marks the first application of the UK’s new regulatory framework under the Digital Markets, Competition and Consumers Act 2024. The designation recognizes Google’s substantial and entrenched market power, with the company commanding over 90% of the UK search market.

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Key Aspects of the SMS Designation

Scope of Designation: The SMS designation applies to Google’s general search and search advertising services. Notably, Google’s Gemini AI assistant is currently excluded from this designation, though the CMA has indicated that this position may be reviewed in the future. Other AI-based search features, such as AI Overviews and AI Mode, are included under the SMS designation. (GOV.UK)
Potential Interventions: With SMS status, the CMA gains the authority to impose various interventions aimed at promoting fair competition and consumer choice. Proposed measures include:
- Choice Screens: Implementing screens that allow users to select alternative search engines, potentially featuring AI-based competitors. (The Guardian)
- Fair Ranking Practices: Ensuring that search results are ranked in a manner that is transparent and non-discriminatory. (The Guardian)
- Data Portability: Facilitating easier transfer of data for advertisers and publishers to promote interoperability. (The Guardian)
- Publisher Consent: Requiring Google to obtain consent from publishers for content used in AI-generated outputs. (The Guardian)
Consultation Process: The CMA has engaged with over 80 stakeholders and conducted a public consultation to gather feedback on the proposed interventions. This collaborative approach aims to ensure that any regulatory actions are well-informed and balanced. (GOV.UK)

Implications for Advertisers and Publishers

Advertisers: The potential for increased competition may lead to changes in auction dynamics and cost-per-click trends. Advertisers may need to adapt to new rules governing data portability and fair ranking practices.
Publishers: Greater control over how their content is used in AI-generated outputs could lead to improved attribution and traffic distribution. However, the implementation of choice screens may alter user behavior and traffic patterns.

Google’s Response

Google has expressed concerns that the SMS designation and the associated interventions could hinder innovation and lead to increased costs for consumers and businesses. The company has cited potential negative impacts from similar regulations in other regions as precedent. Despite these concerns, Google has pledged a £5 billion investment in the UK, primarily in data centers and AI research, underscoring its commitment to the market. (Financial Times)

Looking Ahead

The CMA’s decision sets a precedent for regulating dominant digital platforms under the new SMS framework. While no immediate changes are mandated, the designation empowers the CMA to implement targeted interventions aimed at fostering competition and protecting consumers. The ongoing consultation process will be crucial in shaping the future landscape of digital markets in the UK.

The UK’s Competition and Markets Authority (CMA) has designated Google with “Strategic Market Status” (SMS) in general search and search advertising services. This marks the first application of the UK’s new regulatory framework under the Digital Markets, Competition and Consumers Act 2024. The designation acknowledges Google’s substantial and entrenched market power, with the company commanding over 90% of the UK search market. While not an accusation of wrongdoing, the SMS status empowers the CMA to implement targeted interventions aimed at promoting fair competition and consumer choice.

Key Features of the SMS Designation

Scope of Designation: The SMS designation applies to Google’s general search and search advertising services. Notably, Google’s Gemini AI assistant is currently excluded from this designation, though the CMA has indicated that this position may be reviewed in the future. Other AI-based search features, such as AI Overviews and AI Mode, are included under the SMS designation. (GOV.UK)
Potential Interventions: With SMS status, the CMA gains the authority to impose various interventions aimed at promoting fair competition and consumer choice. Proposed measures include:
- Choice Screens: Implementing screens that allow users to select alternative search engines, potentially featuring AI-based competitors. (The Guardian)
- Fair Ranking Practices: Ensuring that search results are ranked in a manner that is transparent and non-discriminatory. (The Guardian)
- Data Portability: Facilitating easier transfer of data for advertisers and publishers to promote interoperability. (The Guardian)
- Publisher Consent: Requiring Google to obtain consent from publishers for content used in AI-generated outputs. (The Guardian)
Consultation Process: The CMA has engaged with over 80 stakeholders and conducted a public consultation to gather feedback on the proposed interventions. This collaborative approach aims to ensure that any regulatory actions are well-informed and balanced. (GOV.UK)

Implications for Advertisers and Publishers

Advertisers: The potential for increased competition may lead to changes in auction dynamics and cost-per-click trends. Advertisers may need to adapt to new rules governing data portability and fair ranking practices.
Publishers: Greater control over how their content is used in AI-generated outputs could lead to improved attribution and traffic distribution. However, the implementation of choice screens may alter user behavior and traffic patterns.