The UK’s Competition and Markets Authority (CMA) has officially designated Google with strategic market status (SMS) under the new digital markets competition regime. Specifically, it found that Google holds “substantial and entrenched market power and a position of strategic significance” when it comes to general search and search advertising services. The digital markets competition regime came into force on January 1, 2025 and will enable the agency to “promote competition in fast-moving digital markets, while protecting UK consumers and businesses from unfair or harmful practices by the very largest technology firms.”
So what does getting the “strategic market status” designation mean, exactly? As the CMA clarifies, it doesn’t automatically mean Google did something wrong, but it does allow the agency to launch interventions that ensure general search services in the UK are “open to effective competition” and that businesses relying on Google are being treated fairly. The company is expecting to face new rules and regulations on how Search works in the near future. UK’s CMA launched an investigation on Google’s standing in the search industry on January 14 to confirm its status.
“We have found that Google maintains a strategic position in the search and search advertising sector – with more than 90% of searches in the UK taking place on its platform,” said Will Hayter, Executive Director for Digital Markets at the CMA. To be clear, the designation applies to the company’s AI Overviews and AI Mode features, as well, but not to its Gemini AI assistant, at least for now.
The CMA said it’s expecting to start consulting on possible interventions later this year. In an announcement of its own, Google said that “many of the ideas for interventions that have been raised in this process would inhibit UK innovation and growth, potentially slowing product launches at a time of profound AI-based innovation.” The company believes that some of those ideas would “pose direct harm to businesses” and could lead to higher prices for consumers.
“The UK enjoys access to the latest products and services before other countries because it has so far avoided costly restrictions on popular services, such as Search. Retaining this position means avoiding unduly onerous regulations and learning from the negative results seen in other jurisdictions, which have cost businesses an estimated €114 billion,” Google wrote. By “other jurisdictions,” Google means the European Union, whose similar Digital Markets Act law designated the company as a gatekeeper in 2023.
Big Tech companies are coming out of the woodwork to challenge the European Commission’s new enforcement regime for digital competition with TikTok and Meta Platforms filing legal appeals this week.
Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft are all considered “gatekeeper” companies under the Digital Markets Act (DMA), the European Union’s new digital rulebook, for 22 core online services they run — everything from app stores and social networks to messaging services and online marketplaces.
Meta on Wednesday was the first to say it had filed a legal challenge to the EU’s revamped enforcement regime before the European Union’s General Court, disputing EU officials’ decision to bring its Marketplace and Messenger services in scope of the new digital competition rulebook.
TikTok’s owner ByteDance on Thursday argued its video-sharing platform was wrongly labeled as a social network under the new law. The firm also took issue with being targeted as a digital giant when it sees itself as a challenger to the other “gatekeeper” companies that have a vast ecosystem of digital services.
The six targeted firms had until November 16 to file their legal paperwork. Some already indicated that they aren’t happy with the new labels the Commission has given them, according to filings published online in recent weeks.
Already some companies are making changes to how they run their businesses in Europe. Facebook and Instagram will offer paid ad-free subscriptions in the EU. Google has been opening up data sharing as part of German and Italian antitrust cases.
Their other option is to convince European Union judges to overturn the Commission’s decisions.
But we don’t understand!
Companies designated as gatekeepers can ask the EU’s General Court to cancel individual decisions. That’s precisely what Meta and TikTok did in their filings Wednesday.
Alfonso Lamadrid, a partner at law firm Garrigues, said they could claim that they don’t understand why certain services were caught by the law and that EU officials failed to give “sufficient reasoning.”
They could also file appeals — either now or later — on the Commission’s probes to determine whether Apple’s iMessage, along with Microsoft’s Bing search engine, its Edge web browser and its advertising service, should be considered core platform services. There’s a February 6 deadline to wrap those up. Another probe into Apple’s iPadOS has until September 6 next year.
Lamadrid — who has worked with Google on antitrust challenges including the tech giant’s recent court appeal against an antitrust fine for its shopping service — said he doesn’t think Big Tech firms “will be taking the decision to appeal very lightly.”
Who might grumble?
Meta and TikTok aren’t the only gatekeepers unhappy with the Commission’s decisions so far.
Meta isn’t the only gatekeeper unhappy with the Commission’s decisions so far | Drew Angerer/Getty Images
Apple previously argued with the Commission that its services shouldn’t be subject to the new rules, according to the Commission documents.
Apple tried unsuccessfully to convince officials that its App Store comes in five separate versions for different devices and that its Safari browser in three, which would reduce the number of active users for each service. Apple didn’t respond to a request for comment.
ByteDance told the Commission earlier that its viral video app is “about content discovery, not about establishing or maintaining real-world connections,” according to an EU decision published last month.
Telecoms companies are also unhappy. They told the Commission it should designate Apple’s iMessage as a core platform service that needs to follow DMA curbs, according to a letter to Internal Market Commissioner Thierry Breton seen by POLITICO.
What are the others saying?
Microsoft is classified as a gatekeeper for its social network LinkedIn and Windows PC operating service. Microsoft spokesperson Robin Koch said in September that the tech giant “accepts our designation as a gatekeeper under the Digital Markets Act and will continue to work with the European Commission” to meet its obligations.
Alphabet — which has eight core platform services targeted under the DMA, including Google Search and web browser Chrome — said in September it will “work closely with the European Commission and other stakeholders” and would “make changes that meet the new requirements while protecting the user experience.”
Alphabet — which has eight core platform services targeted under the DMA, including Google Search and web browser Chrome — said in September it will “work closely with the European Commission and other stakeholders” and would “make changes that meet the new requirements while protecting the user experience.” | Justin Sullivan/Getty Images
Amazon’s marketplace and advertising businesses were both labeled as core platform services under the DMA in September. The company said at the time it is “committed to delivering services that meet our customers’ requirements within Europe’s evolving regulatory landscape” and would “work constructively with the European Commission as we finalize our implementation plans.”
Amazon earlier this year did challenge another digital label in the EU, asking a court to cancel the Commission’s declaration that it was a Very Large Online Platform.
But with just four months to go now until the rules are enforceable, any challenge could just poke the bureaucratic bear.
“This is now an important moment in time for compliance,” Lamadrid said, “so it’s not ideal to have pending court proceedings while you’re trying to negotiate with the Commission on compliance… I don’t think it’s in the company’s best interest to antagonize the Commission.”
This article was updated on November 16 to include recent developments.
U.S. Republican Senator Ted Cruz called for details on the Federal Trade Commission’s (FTC) work with its European counterparts in a letter to FTC Chairwoman Lina Khan on Tuesday.
The conservative Texas lawmaker criticized Khan and other FTC staff for meeting with European Commission officials to discuss incoming EU rules designed to rein in Big Tech companies, which are largely U.S.-based.
“It is one thing for the EU to target U.S. businesses,” the letter said, but “it is altogether unthinkable that an agency of the U.S. government would actively help the EU” on its digital platform regulation.
The FTC’s “collusion with foreign governments not only undermines U.S. sovereignty and Congress’s constitutional lawmaking authority,” Cruz’s letter said, “but also damages the competitiveness of U.S. firms and could negatively affect the savings of millions of Americans who hold stock in those companies” through pension plans.
The letter comes just as tech giants like Meta, X (formerly Twitter) and TikTok are set to have to comply with the Commission’s Digital Services Act (DSA); they face steep fines if they don’t follow the DSA’s content-moderation rules, adopted in 2022.
The Commission also plans to label companies with core digital services — such as Apple’s App Store and Google Search — as “gatekeepers” under the Digital Market Act (DMA), which is designed to make it harder for them to abuse their market dominance. Seven companies — including the U.S.-headquartered Apple, Meta, Alphabet, Amazon and Microsoft — notified their own platform services to the Commission as potential gatekeepers in July.
The senator said that the DMA and DSA “objectively discriminate against U.S. companies” through mandatory compliance costs. In the letter, Cruz asks for detailed information on the number of FTC officials who have been “sent to Europe since June 2021,” as well as their titles and monthly expenses.
Cruz also asked for details on the Commission’s office in San Francisco, which opened last September, and the FTC officials who have met with their EU counterparts there.
On a visit to the EU’s California office in June, Internal Market Commissioner Thierry Breton rejected accusations that the bloc’s digital rulebooks target U.S.-based companies, calling the idea an “urban legend” and noting that non-U.S. companies must also comply with the rules.
It follows a similar letter from Republican U.S. Representative James Comer, who’s the chairman of the House Oversight Committee, asking that communications between the FTC and Commission on the DMA be turned over to Congress.
Twitter has abandoned the EU’s code of practice on disinformation, Thierry Breton said late Friday, but Europe’s internal markets commissioner insisted that “obligations remain” for the social networking giant.
“You can run but you can’t hide,” Breton said in a tweet, after confirming that the platform owned by Elon Musk had left the bloc’s disinformation code, which other major social media platforms have pledged to support.
“Beyond voluntary commitments, fighting disinformation will be a legal obligation under DSA as of August 25,” Breton said, referring to the Digital Services Act — new social media rules that include fines of up to 6 percent of a company’s annual revenue.
“Our teams will be ready for enforcement,” the commissioner said.
The code of practice on disinformation is a voluntary rulebook that includes obligations for platforms to track political advertising, stop the monetization of disinformation, and provide greater access to outsiders. Participation in the code is designed to help offset some of these companies’ obligations within the separate and mandatory DSA.
Twitter is one of eight social media platforms that fall under the scope of the DSA. The others are Facebook, TikTok, YouTube, Instagram, LinkedIn, Pinterest and Snapchat.
Breton has publicly vowed that he would personally hold Musk to account for complying with the EU’s content rules.
LONDON — As the U.K. prepares to overhaul its competition regime, a fierce lobbying battle has broken out between the world’s largest tech companies and their challengers.
Ministers are gearing up to publish new competition legislation in late-April, giving regulators more power to stop a handful of companies dominating digital markets.
But concern over the U.S. tech giants’ influence in Westminster has prompted ministers close to the bill to warn that the new legislation could be watered down.
Two ministers have expressed concerns that Big Tech firms are seeking to weaken the process for appealing decisions made by the country’s beefed-up competition regulator, according to multiple people who were either present at those discussions or whose organizations were represented there. They requested anonymity to discuss private meetings.
One MP said a minister had also approached them to raise concerns, while at an industry roundtable, two ministers spoke of worry about Big Tech firms trying to influence the appeal mechanism.
An industry representative said: “There has been a sh*t load of lobbying from Big Tech, but I don’t know if they’ll succeed.”
Appealing to who?
The Digital Markets, Competition and Consumer Bill will give new powers to a branch of the Competition and Markets Authority called the Digital Markets Unit (DMU). Under the plan, the DMU will be able fine a company 10 percent of their annual turnover for breaching a code of conduct.
The code, which has not yet been published, would be designed to ensure that a company with ‘strategic market status’ cannot “unfairly use its market power and strategic position to distort or undermine competition between users of the … firm’s services,” the government has said.
Jonathan Jones, senior consultant in public law at Linklaters and formerly the head of the U.K. government’s legal department, wrote that the plan would have “very significant consequences” for Big Tech firms and could force them to “significantly alter” their business models.
One of Big Tech’s concerns is that the bill will only allow companies to appeal decisions made by the DMU on whether or not the right process was followed, known as the judicial review standard, rather than the content or merit of the decision. That puts it in line with other regulators and should mean the process is faster, but it also makes it harder to appeal decisions.
Big Tech firms want to be able to appeal on the “merit”, arguing it is unfair that they can’t challenge whether a DMU decision was correct or not. They also argue it won’t necessarily be slower than the judicial review standard.
One of the biggest fears from medium-sized firms is that the biggest tech companies will use strategies to lengthen the appeals process or even get the entire bill delayed | iStock
Tech Minister Paul Scully, who has responsibility for the bill, told POLITICO: “We want to make sure that the legislation is flexible, proportionate and fair to both big and challenger companies. Any remediation needs to be in place quickly as digital markets move quickly.”
One representative of a mid-sized tech firm said: “This is the fundamental point of contention and it will influence whether the bill works for SMEs and challengers against Big Tech.
“The fear is that big companies with big lawyers understand how to eke things out (during the appeals process) so that they’ll keep their market advantage for years. We’ve heard ministers express these concerns too.”
Consumer group Which? is also urging the government to stay with its proposed appeal system. “For the DMU to work effectively, the government must stick to its guns and ensure that the decisions it reaches are not tied up in an elongated appeals process,” said director of policy, Rocio Concha.
‘Investigator and executioner’
But Jones argued that the bill will make the DMU too powerful.
“The DMU will have power to decide who it is going to regulate, set the rules that apply to them, and then enforce those rules,” he wrote. “This makes the DMU effectively legislator, investigator and executioner.”
On the appeal method, Jones argued that it is an “oversimplification” to think that the government’s proposed standard of appeal would be quicker than one based on merits.
Ben Greenstone, managing director of tech policy consultancy Taso Advisory, said: “I can understand the argument from both sides. The largest tech companies are incentivized to push back against this, but my guess is the government will keep the appeals process as it is, because it keeps it in line with the wider competition regime.”
However, he added the bill would work better if some sort of compromise can be found with the biggest tech companies.
The international playbook
One of the biggest fears from medium-sized firms is that the biggest tech companies will use strategies already tried and tested abroad to lengthen the appeals process or even get the entire bill delayed.
Rick VanMeter, executive director of the Coalition for App Fairness, which is based in the U.S. but has U.K. members, said: “In the U.S. we’ve learned that these mobile app gatekeepers’ will stop at nothing to preserve the status quo and squash their competition.
“To be successful, policymakers around the world must see through these gatekeepers’ efforts for what they are: self-serving attempts to retain their market power.”
Google and Microsoft declined to comment. Apple did not respond.
