CMA proposes first designation under the digital markets competition regime

As a landmark development in the implementation of the UK digital markets competition regime, introduced under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), the Competition and Markets Authority (CMA) is consulting on the proposed designation of Google with Strategic Market Status (SMS) in general search services. 

In this briefing, we set out:

• When the designation of an SMS firm can take place.
• Why the CMA is proposing to designate Google with SMS in general search services.
• What the CMA is currently consulting on.
• What the designation of Google with SMS in general search services could mean for UK businesses.

We conclude by noting what all UK businesses should consider and look out for between now and early 2026.

When can SMS firms be designated?

Under the digital markets competition regime, which came into force on 1 January 2025, the CMA is able, following public consultation, to designate firms as having SMS in relation to a particular digital activity. To be designated with SMS, a business must be found to have:

1. Substantial and entrenched market power in a digital activity linked to the UK.
2. A position of strategic significance.
3. Global turnover of more than £25 billion or UK turnover of more than £1 billion.

Once designated, the CMA can impose bespoke conduct requirements or propose pro-competition interventions to achieve positive outcomes for UK consumers and businesses.

Why is the CMA proposing to designate Google with SMS?

The CMA launched its first SMS investigation, in January 2025, into whether to designate Google as having SMS in respect of general search services, including general search and search advertising (ie, where an advertiser pays for its advert to appear next to the results from a user’s search). The CMA has been considering Google’s practices in the digital advertising space for some time, with its market study in 2019 being followed by its provisional finding in autumn 2024 that Google had abused its market power in digital advertising by anti-competitive self-preferencing its own ad exchange to restrict competition in the UK.

What is the CMA consulting on?

In connection with its SMS investigation into Google, the CMA has provisionally found that Google has SMS in general search and search advertising. The CMA noted that Google Search accounts for more than 90% of all general search queries in the UK and, last year, over 200,000 firms in the UK collectively spent more than £10 billion on Google search advertising. On 24 June 2025, the CMA began consulting on the proposal to designate Google as having SMS in general search services. The proposed designation would include Google’s AI-based search features but not Gemini AI Assistant itself (at least not for the foreseeable future).

In the interests of pace and predictability under its “4Ps” framework (pace, predictability, proportionality and process), the CMA is also consulting on a roadmap of potential actions it could prioritise if Google is designated. The early priorities include:

• Requiring choice screens for users to access different search providers.
• Ensuring fair ranking principles for businesses appearing on Google search.
• More transparency and control for publishers whose content appears in search results.
• The portability of consumer search data.

The CMA has indicated that it has also identified a second category of more complex issues in relation to which there may be a case to answer, but which require further consideration. For these, the CMA has acknowledged that potential interventions may be more complex to develop. These issues will be considered at a later stage, starting in the first half of 2026.

The CMA also says that it has identified additional areas for possible action (eg, restricting the use of default agreements and providing access to underlying search data), but has indicated that it will wait to see how such issues may be addressed in the ongoing antitrust case brought against Google by the US Department of Justice. This approach is consistent with the CMA’s priorities, following the strategic steer issued by government earlier in the year, for the CMA to use its tools proportionately with growth and investment in mind (see our briefing). It is also in line with the proportionality aspect of the CMA’s “4Ps” framework (see our briefing). What remains to be seen is how such developments in the US could impact the regulatory landscape in the UK.

Finally, the CMA indicated that it has been keeping under review the timing and scope of any further SMS designation investigations. The CMA had initially indicated initiating a SMS designation investigation into a third area of digital activity towards the end of June (see our briefing). However, the CMA has now stated that it anticipates that possible options for a further designation investigation will be considered by the CMA Board in early 2026. This will allow the CMA to focus on progressing current SMS investigations and associated actions to improve outcomes in those markets for the remainder of 2025.

What could the designation of Google mean for UK businesses?

While there are no guarantees at this stage, the designation of Google (which has already been designated as a gatekeeper under the similar, but subtly different, EU Digital Markets Act, and faces ongoing scrutiny in relation to its digital advertising practices in the EU, the US and elsewhere) would not come as a surprise. For UK businesses, the designation of Google as having SMS in general search services under the digital markets competition regime and the imposition of tailored conduct requirements (if this is ultimately what the CMA decides) could lead to a more level playing field with:

• Increased opportunities to reach and click with users.
• Opportunities to rank more fairly in Google search results.
• Greater control over how their content is used in search results and AI-generated responses.
• The ability to transfer and access consumer search data, which could be used to develop new products and services.

What should UK businesses do next?

The CMA is consulting on the proposed designation and roadmap until 21 July 2025. Given the increasing role of digital advertising and the scope and impact of Google in the digital advertising space, all UK businesses should:

• Familiarise themselves with the consultation and consider how the proposed changes may impact on their business. The CMA has purposefully adopted an open and consultative approach to the way in which it implements the digital markets regime and has said that it welcomes views on its proposed designation decision and accompanying roadmap. Businesses should therefore consider submitting a response, in particular if they identify benefits or opportunities arising from these developments.
• Stay updated on the CMA’s consultation process and final SMS designation decision, which is expected by 13 October 2025.
• If the CMA decides to designate Google as having SMS:
  • look out for a CMA consultation in October on initial conduct requirements.
  • look out for the CMA’s publication in early 2026 of an updated roadmap setting out actions to address more complex issues over the longer term.
  • look out for a decision in early 2026 by the CMA on the potential launch of a third SMS designation investigation.