More Than a Slap on the Wrist: Understanding the Power of the CMA’s New Tools

The UK regulator’s action against Google is far more than a mere slap on the wrist; it’s the deployment of a powerful new toolkit designed for deep, structural intervention. Understanding the power of these tools is key to grasping the significance of the “strategic market status” (SMS) designation.
The first tool is the SMS designation itself. This is not a finding of guilt, but a reclassification of the company as a regulated entity, similar to a major utility. This fundamentally changes the rules of engagement.
The second, and most important, tool is the power to impose “conduct requirements.” These are not vague principles but can be highly specific, legally binding rules. The CMA could, for example, specify the exact design and wording of a “choice screen” or set technical parameters for “fair ranking” that Google’s engineers would have to implement.
The third tool is the power of enforcement. If Google fails to comply with these conduct requirements, the CMA can levy fines of up to 10% of the company’s global annual turnover. For a company the size of Google, this could mean fines running into the tens of billions of pounds, a penalty so large that it cannot be ignored or treated as a simple cost of doing business.
This combination of proactive rule-setting and punitive enforcement power makes the CMA’s new regime one of the most formidable regulatory frameworks in the world. It’s a system designed not just to punish, but to compel change.