Report from CNBC
In Brief – The UK Competition and Markets Authority (CMA) has opened an investigation of Google under the Digital Markets, Competition and Consumer’s Act (DMCC) to determine if the digital giant has “strategic market status” (SMS) under the new law designed to protect competition in digital markets. The regulator is focused on Google search, which reportedly holds a 90% market share in the UK. Designating a company as an SMS allows the CMA to develop and enforce new rules against anticompetitive conduct. The CMA’s chief executive said the goal was to ensure a “level playing field” in search and cited the interests of users, rival search engines, advertisers, and news organizations. Google issued a response that noted “the need to align regulatory decisions with the Government’s growth mission” and argued against “overly prescriptive digital competition rules”.
Context – Of course, Google will have SMS per the DMCC. All five US-based digital giants determined to be “gatekeepers” by the EU’s Digital Markets Act (DMA) will. The main questions are how long it will take, and more importantly, what are the company-specific rules that will be instituted. For example, the DMA now imposes 18 high-level mandates on 24 platforms of seven gatekeepers. The DMCC creates a company-by-company regulatory process to set the rules. That process is now part of a plodding effort by the UK to chart some manner of middle path between the EU and US on digital regulation. The DMCC parallels the DMA, and the Online Safety Act the EU’s Digital Services Act. And there are big antitrust enforcement actions in all three jurisdictions. AI is another matter with the EU charting the regulatorily path. Prime Minister Keir Starmer recently announced initiatives to push for AI investments and a pro-growth innovation climate in the UK, saying regulation will “be proportionate and grounded in the science” and investors will get “stability, pragmatism and the good sense they would expect from democratic British values.” Hence Google’s reference the Government’s growth mission.