The UK's Competition and Markets Authority (CMA) has launched its first official investigation of 2025, targeting Google's market dominance in search, including its new AI search capabilities and giant search advertising business. The probe aims to assess whether Google's dominance is stifling competition and innovation in the search market, and what remedies can be imposed to promote fair competition and consumer protection.

The CMA is seeking input from interested parties, with a deadline of February 3 to comment. This investigation is the first of two promised by the CMA this month, targeting Big Tech companies under its new rules. The watchdog's chief executive, Sarah Cardell, emphasized the importance of ensuring Google's services deliver good outcomes for people and businesses, particularly with AI transforming search services.

Google's search dominance in the UK is staggering, with over 90% of general search queries attributed to the tech giant. Moreover, more than 200,000 businesses rely on Google's portal to advertise. The CMA's investigation comes on the heels of Google's losses in multiple antitrust cases in other jurisdictions, including the US and Europe. The CMA is in "regular contact" with other authorities, suggesting a coordinated effort to tackle Big Tech's market power.

The CMA is exploring whether Google's search business can be designated as having "strategic market status" (SMS), which would enable the watchdog to impose conduct requirements or propose pro-competition interventions. The investigation will focus on three key areas: whether Google is stifling competition and innovation in search, whether it gives preference to its own services in areas like advertising and AI, and whether it is using large quantities of consumer data without informed consent.

The investigation's outcome could be far-reaching, with potential remedies including business break-up proposals, opening up search results to competitors, unbundling Google's integrated services, or opening up the advertising part of the results to other parties. The CMA estimates that effective competition could keep down the costs of search advertising, equivalent to nearly £500 per household per year, which could have a ripple effect on the entire economy.

The investigation also coincides with Google's efforts to improve its search experience in the face of new competition from AI-based services like ChatGPT and Perplexity. These services are building effective alternatives to Google's search engine using generative AI technology, which could potentially forego links to other sites altogether. Google has been developing its own AI-powered search experience, called Gemini, and has been returning fully-formed 'answers' to search queries at the top of its results pages.

The CMA's investigation raises questions about Google's potential obligations to provide GenAI results from other parties, particularly if its own AI technology is deemed to be giving it an unfair advantage. As the search landscape continues to evolve with AI, the CMA's probe could have significant implications for the future of search and advertising in the UK.

With the CMA's investigation underway, the tech industry will be watching closely to see how this probe unfolds and what consequences it may have for Google and the broader search market. As the UK's antitrust watchdog seeks to promote fair competition and consumer protection, this investigation could set a precedent for future probes into Big Tech's market dominance.