Alphabet Under Pressure as UK Watchdog Intensifies Antitrust Scrutiny
The UK's Competition and Markets Authority has designated Google with 'Strategic Market Status', paving the way for stricter regulation and potential fines.
Alphabet Inc.'s Google is facing a significant regulatory challenge in the United Kingdom, as the nation's antitrust watchdog, the Competition and Markets Authority (CMA), has intensified its scrutiny of the tech giant's business practices. In a move that could have far-reaching implications for Google's operations in the UK, the , a classification that brings the company under a new, more stringent regulatory regime.
The SMS designation is a key component of the UK's new Digital Markets, Competition and Consumers Act (DMCCA), which came into force on January 1, 2025. The act is designed to give the CMA more power to proactively shape the behavior of the most powerful tech firms and promote competition in digital markets. With over 90% of the UK search market, Google was a primary target for this new legislation. The CMA's investigation is examining whether Google's dominance creates barriers for competitors, stifles innovation, and harms consumers.
For investors, the CMA's actions represent a significant overhang for Alphabet's stock. The SMS designation means the CMA can now impose 'conduct requirements' on Google, which could force the company to change how it operates its search and advertising businesses. The regulator is also investigating whether Google self-preferences its own services and unfairly uses consumer data. If Google is found to be in breach of the new rules, it could face , a figure that would run into the tens of billions of dollars.
This is not the only regulatory battle Google is fighting in the UK. The CMA is also conducting a separate investigation into the company's powerful position in the 'ad tech' stack, the complex system that facilitates the buying and selling of online advertising. In September 2024, the CMA issued a 'statement of objections' in that case, alleging that Google has been since 2015.
While Google maintains that its tools help businesses and consumers, the increased regulatory pressure in the UK is part of a broader global trend of governments and regulators taking a tougher stance on 'Big Tech'. Investors will be closely watching the outcomes of the CMA's investigations, as they could set a precedent for how Google is regulated in other major markets around the world. The deadline for the CMA's investigation into Google's search and advertising services is October 13, 2025, making the coming months a critical period for the company.