January 15, 2025 - 1:00pm

The UK’s market regulator received new powers on 1 January to police digital markets, and the watchdog is wasting no time going after Big Tech. The Competition and Markets Authority (CMA) has announced an investigation by its Digital Markets Unit into Google’s search business. Google has already been ruled by an American court to illegally maintain a search monopoly, in the first of two ongoing antitrust trials against the tech giant. The US government has requested a break-up of Google to introduce more competition into the market.

The task of policing should be easier now that the CMA can declare certain firms have a gatekeeping role, or “Strategic Market Status”, mirroring the approach taken in the EU’s Digital Markets Act. The unit can impose conditions on how the platforms conduct business in Britain. Around 200,000 UK businesses pay to use Google’s search listings, the CMA says.

Ironically, the first significant competition action against Google, by price comparison site Foundem in 2008, also came from Britain and also involved the company’s search business. By the time the court reached a verdict in 2017, it had long since ceased to compete.

The UK now liaises with competition authorities in the US, where a “New Brandeis” school of lawyers and academics seeks to break up the power of global tech companies and intervene more actively in corporate mergers. Donald Trump’s nomination of J.D. Vance’s economic advisor Gail Slater to head the US Department of Justice suggests the populist movement will not run out of steam. “Big Tech has run wild for years, stifling competition in our most innovative sector,” the President-elect said in December.

Now, with support for globalisation collapsing, and the Big Tech monopolies so emblematic of the era, what position might we expect the Labour government to take? Challenging powerful corporate interests used to be a rallying cry for the Left but, as Politico noted in 2023, under Keir Starmer it has changed significantly.

This was confirmed by the Investment Summit in October which saw former Google CEO Eric Schmidt praise Starmer in a wooden head-to-head session on stage. “Wealth creation is the number one mission of a Labour government,” said Starmer. “You actually believe this!” Schmidt replied.

Labour has now confirmed it will seek a permissive new regime for copyright in the UK, allowing artificial intelligence scrapers to train their models on the UK’s copyrighted work, unless owners of the material engage in a laborious opt-out procedure. This would create the most indulgent legal framework in the world, and Google, Meta and Microsoft would be significant beneficiaries.

“Hearing reports of artists giving up their careers because of today’s announcement from the UK Govt which favours AI and big tech over the protection of the value of copyright,” said music producer Thomas Hewitt Jones. The decision also potentially puts the UK in breach of the Berne Convention, a surprising course for a prime minister who often cites treaties and the “international rule of law” as guiding lights.

Why would Starmer imperil British business in order to please giant American companies? A veteran public affairs executive who attended Labour’s autumn conference found a clue in the approach of Gordon Brown’s 2007-10 government. “They look around the room to see who is the most powerful, and then see it as their job to make them happy,” he told me.

When approached for comment, Google said it “will continue to engage constructively with the CMA to ensure that new rules benefit all types of websites, and still allow people in the UK to benefit from helpful and cutting edge services”. The provision of cutting-edge services for a price is sure to please executives of Google and Microsoft, but the regulator’s investigation is a warning. Starmer should be aware of the potential political backlash of appeasing foreign tech corporations.