What Exactly Happened
- SMS Designation
- On 10 October 2025, the CMA confirmed that Google has been officially designated with Strategic Market Status (SMS) in general search and search advertising. (GOV.UK)
- This is under the UK’s new regulatory regime, the Digital Markets, Competition and Consumers Act 2024, which gives the CMA powers to impose targeted rules on dominant digital firms. (GOV.UK)
- The decision followed a lengthy investigation and consultation process, during which the CMA received feedback from over 80 stakeholders. (GOV.UK)
- Why Google Got SMS
- The CMA concluded that Google has “substantial and entrenched” market power in search and search advertising. (Computing)
- Google handles over 90% of UK search queries, making it deeply influential. (GOV.UK)
- The CMA’s scope for this SMS includes traditional search, AI‑based features like “AI Overviews” and “AI Mode”—but excludes Google’s Gemini AI assistant (for now). (GOV.UK)
- What the Designation Does — But Doesn’t Do Immediately
- Not a finding of wrongdoing: SMS itself is not a penalty or a judgment that Google has violated the law. (GOV.UK)
- It enables the CMA to impose targeted interventions (“conduct requirements”) to ensure fair competition. (Computing)
- The CMA has laid out a roadmap of potential measures.
- Possible interventions could include:
- “Choice screens” that let users pick or switch search engines. (The Guardian)
- Fairer, non‑discriminatory search ranking requirements. (CNBC)
- More control for publishers, particularly over how their content is used in AI-generated search results. (The Guardian)
- Potential data or interoperability obligations, e.g., around how search data is shared or used. (GOV.UK)
- The CMA plans to consult on these possible measures later. (GOV.UK)
Key Implications & Risks
- Increased Regulatory Scrutiny: With SMS status, Google is under a new level of regulatory scrutiny specifically for its search business.
- Search Market Changes: If choice screens or ranking rules are enforced, users might be more exposed to alternative search engines, and Google’s prioritization of its own services could be limited.
- Impact on Advertisers: Search advertisers might see changes in how search results pages are laid out, how ads compete with “organic + AI” results, and possibly lower ad dominance by Google.
- Publisher Leverage: Content publishers could gain more power / negotiation leverage, especially around how their content is incorporated into generative AI responses.
- Innovation Tension: Google warns that too-strict rules may “hinder innovation and slow product rollouts,” especially in AI. (The Guardian)
- Enforcement Risk: If Google does not comply with eventual requirements, the CMA could fine it — under SMS powers, non-compliance could carry serious penalties. (PPC Land)
Expert Commentary & Analysis
- Will Hayter (CMA): The CMA’s Executive Director for Digital Markets said the SMS designation will “promote competition … helping businesses big and small, innovation, investment …” (GOV.UK)
- Competition Lawyers / Analysts:
- According to The Guardian, the CMA is likely to push for “choice screens” (users could pick alternative search engines) and fair ranking. (The Guardian)
- Legal experts suggest this is a measured step: the CMA is not slamming Google with extreme fines yet, but rather building a framework for future, targeted interventions. (The Guardian)
- Google’s Response:
- Google argues that the planned regulation could slow UK innovation, especially around AI products. (Computing)
- They also warn that some regulatory ideas (like forced ranking changes) may “raise prices for customers.” (Computing)
- Good question. Here are case‑study style scenarios and expert‑level commentary on what the UK CMA’s designation of Google with Strategic Market Status (SMS) could mean in practice, and how different stakeholders might be affected.
Case Studies & Scenarios
Case Study 1: A Small Search Advertiser / Local Business
- Context: A local business (e.g., a retailer or service provider) relies heavily on Google Search Ads to reach customers.
- How SMS Might Impact Them:
- If the CMA forces Google to implement fairer search ranking for ads or more transparency in how ad inventory is allocated, this advertiser could benefit from more predictable ad performance or reduced ad costs.
- With “choice screens,” users might be encouraged to try alternative search engines. That could shift some traffic away from Google — potentially reducing volume, but also giving the business an opportunity to diversify their paid search strategy.
- Potential Risks / Upsides:
- Upside: Better transparency + possibly fairer competition might lower the barrier to entry or ad costs.
- Risk: Google could respond with higher prices or more restrictive ad products to defend its market position.
- Strategic Action: Local advertisers might start testing non-Google search channels more aggressively (or prepare to respond quickly to any new ad‑ranking changes).
Case Study 2: Publisher / Content Creator
- Context: A news publisher or blog relies on Google Search traffic, and possibly on how their content appears in Google’s AI‑driven “Overviews” or “AI Mode.”
- How SMS Might Impact Them:
- The CMA could introduce rules to give publishers more control over how their content is used in Google’s AI-generated search summaries or “overviews.” (The Guardian)
- Google might be required to be more transparent about which publisher content is used in AI “answer boxes” or LLM‑powered search features. (GOV.UK)
- There may also be data‑portability requirements, meaning publishers could gain access to more search interaction data, enabling them to better understand how Google uses their content. (CNBC)
- Potential Risks / Upsides:
- Upside: More bargaining power; better insight into how Google treats their content; potentially more fair monetization.
- Risk: Google might limit how much “premium” content is used in summaries, or change its ranking or indexing policies.
- Strategic Action: Publishers should engage with the CMA’s consultation, prepare to negotiate, and consider how to protect their content in AI-driven search features.
Case Study 3: Competing Search Engine or AI Answer Engine
- Context: A startup or challenger search engine / LLM-based answer engine (e.g., Perplexity or a niche search product) wants to grow in the UK.
- How SMS Might Impact Them:
- The CMA could force Google to show “choice screens” on certain devices or browsers, giving users the option to pick a rival search provider. (The Guardian)
- There may be interoperability or data requirements, making it easier for other players to compete on data or services. (CNBC)
- Google could be required to maintain more non‑discriminatory search ranking, reducing its ability to favor its own services (or “answer‑box” content) over competitors’. (The Guardian)
- Potential Risks / Upsides:
- Upside: Improved market access, more fairness, and a bit more leeway to compete.
- Risk: Even with SMS, Google still has entrenched dominance; the effectiveness of CMA measures will depend on how strong and enforceable they are.
- Strategic Action: Competing search or AI players should prepare to make the case in CMA consultations, align with publishers, and articulate clear plans for differentiated search experiences.
Expert Commentary & Analysis
- CMA (Will Hayter, Executive Director for Digital Markets):
“We have found that Google maintains a strategic position … with more than 90% of searches in the UK.” (GOV.UK)
- Regulatory / Policy Analysts:
- According to The Guardian, the CMA is seriously considering choice screens, which would force Google to show users a list of alternative search engines when they open a browser or a device — a move that could disrupt Google’s dominance. (The Guardian)
- They also mention “fair ranking” requirements: Google may be required to rank search results / ads in a less biased way — perhaps limiting how Google can prioritize its own services or “answer-box” content. (The Guardian)
- Google’s Position / Risks:
- Google warns that such SMS-based interventions could “hurt innovation” — especially in AI-powered search, where regulatory meddling might slow down product launches. (The Guardian)
- It also argues that prescriptive rules “could have significant implications” for how businesses use its search‑ad platform. (CNBC)
- Broader Market Context:
- The UK’s move mirrors approaches in other jurisdictions (EU, US, Japan) to regulate “gatekeeper” tech firms. (GOV.UK)
- Analysts suggest the CMA’s “roadmap of possible interventions” (published in its investigation) is fairly wide — covering not just search ranking, but also data access, ad transparency, and publisher control. (GOV.UK)
Strategic Implications & Risks
- For Advertisers / SMEs:
- There could be more competition in search ad space, possibly driving down prices or enabling more diverse ad placements.
- But there may also be uncertainty as Google’s business model adjusts; advertisers could face changes to how ads are shown, priced, or ranked.
- For Publishers / Content Owners:
- Improved negotiating power: more say over how their content is used in AI-generated search summaries.
- Potential to monetize more effectively if Google has to share data or change how it treats publishers.
- For Competing Search / AI Services:
- A regulatory lever to challenge Google’s dominance.
- Opportunity to attract users via choice screens or better interoperability.
- For Google:
- Risk of enforced structural changes, e.g., to ranking, data sharing, ad transparency.
- Regulatory burden and potential costs — though CMA is saying any intervention will be targeted and proportionate.
- Reputational risk: being regulated so tightly could affect how customers and partners view Google’s future in the UK.