Alphabet’s (GOOGL) subsidiary, Google, is under investigation by the Competition and Markets Authority (CMA) in the United Kingdom due to its dominant role in search and search advertising services. This is the first probe under the country’s new digital market competition rules, which started on January 1, 2025. These rules allow the CMA to label companies like Google as having “strategic market status” and require them to make changes or take steps to promote competition.
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In light of this, Sarah Cardell, chief executive of the CMA, stated that Google controls over 90% of search queries in the UK, and over 200,000 UK advertisers rely on its search ads. Regulators are now looking into whether Google’s strong market position is negatively affecting competition, consumers, and businesses.
CMA to Assess Three Key Areas in the Investigation
The CMA’s probe will address three main concerns about Google’s practices.
The first one is whether Google’s dominance creates barriers for new competitors or stifles innovation in the market. Secondly, it will look into claims that the company favors its own services, like travel and shopping, in search results, possibly hurting rivals. Thirdly, the probe will assess concerns about how Google collects and uses consumer data, especially in terms of fairness and transparency.
The latest U.K. investigation adds to the growing international scrutiny of major tech giants. In the U.S., the Department of Justice has proposed that Google divest parts of its business, like the Chrome browser, to address antitrust issues. Meanwhile, the European Union continues to monitor the practices of large digital platforms, including Google and Meta Platforms (META).
CMA Could Set Stricter Rules for Google
If the CMA concludes that Google holds “strategic market status” (SMS), it may impose stricter measures to ensure fair competition. These could include requiring Google to share data with rivals or granting publishers greater control over their data and how it is used.
It’s important to mention that the CMA plans to complete this investigation by late 2025.
What Is the Price Target for GOOGL?
Turning to Wall Street, Alphabet has a Strong Buy consensus rating based on 24 Buys and seven Holds assigned in the last three months. At $215.75, the average GOOGL price target implies a 13.76% upside potential. Shares of the company have gained over 33.6% over the past year.
