DMCC Act: Google set to become the UK's first SMS designation

On 24 June 2025, the CMA published a Provisional Decision confirming its intention to designate Google with ‘Strategic Market Status’ (SMS) in respect of its general search services.

If confirmed following a consultation period, this will make Google the first tech firm to receive SMS designation under the UK’s Digital Markets, Competition and Consumers Act 2024 (the DMCCA).

In reaching its Provisional Decision, the CMA found that Google Search accounts for more than 90% of all general search queries in the UK, with millions of people relying on it as a ‘key gateway to the internet’. This also makes Google a critical route for UK businesses to reach customers. According to the CMA, over 200,000 firms in the UK collectively spent more than £10 billion on Google search advertising last year.

It is important to note that an SMS designation (if confirmed) does not assume any wrongdoing on Google’s part. It does, however, open the door for the CMA to impose a wide range of structural and behavioural remedies regulating Google’s activities in relation to search services.

The Provisional Decision gives a strong hint as to some of the CMA’s concerns in relation to Google search. This includes the following issues:

• Google’s agreements with mobile device manufacturers to be the default search engine, which can make it more difficult for competitors to reach customers.
• The cost of search advertising – which was equivalent to £33k per advertiser in 2024 – is more expensive than the CMA would expect to see in a more competitive market.
• Limited transparency and fairness in how Google ranks and presents search results.
• Publishers can face challenges in securing fair terms and control over how their content is used in Google’s search and AI-generated responses.
• Innovative businesses can struggle to compete as people cannot easily share their search data with firms developing new services.

In this article, we provide an overview of the Provisional Decision and break down some of the proposed measures that the CMA may implement if it proceeds with the SMS designation, which can be found in a separate ‘Roadmap’ document, also published on 24 June 2025.

Please also see our earlier article on the first stage of the Google SMS investigation, which includes further background of the CMA’s digital markets powers under the DMCCA.

Relevant digital activity

Under the DMCCA, each SMS designation must relate to a specific, defined ‘digital activity’. In this case, the proposed SMS designation will be limited to Google’s provision of ‘general search services’. This comprises:

• general search: a service that searches the world wide web, and can draw on other sources, to return information on any subject; and
• search advertising: a service that connects advertisers to users of general search.

This reflects Google’s position as a two-sided platform in which search advertising revenues effectively fund free consumer search services.

It is notable that the CMA has reflected carefully on the extent to which Google’s AI services fall within the scope of the SMS designation. For example, the CMA has explicitly included Google’s AI Overviews within ‘general search’ as it relies on the same infrastructure and services the same core user function as Google Search.

However, the CMA excluded Google’s dedicated AI assistant – Gemini – on the basis that its current usage is distinct and more focused on content generation than search queries, but they will keep it under review as usage evolves.