UK regulators are scrutinizing a longstanding deal between Apple and Google over the default search engine in the iPhone maker’s mobile Safari browser, reports Reuters.
According to an updated report compiled by the UK government’s Competition and Markets Authority, Google pays Apple a “substantial majority” of the £1.2 billion (roughly $1.5 billion) it pays every year in the UK alone for so-called default positions, in other words when Google pays a company to make its search engine the go-to one in a browser or other platform.
The report says the deal creates a “significant barrier to entry and expansion” for Google competitors. The report also suggests either limiting Apple’s ability to monetize such deals or to give users a choice of search engine upon setup.
For years, mobile Safari has relied on Google search, making the iPhone a substantial revenue-generator for Google’s mobile ad business and giving Google a competitive edge over the competition. In 2014, court documents revealed a $1 billion payment Google made to secure default position on mobile Safari in the US. Analysts estimate that amount has only increased in the years since. Apple benefits greatly from this, with an estimated $9 billion a year from such placement deals, though the company has never disclosed concrete figures.
Regulators are now concerned this massive UK deal, which last year was 50 percent higher than what Google paid for US placement more than six years ago for a far more populous region, may stifle competition. Google competitors — though few, like Microsoft’s Bing and DuckDuckGo, actually remain — may not be in a position to pay such a large sum for prime placement on the default iPhone browser. Here’s the excerpt from the report, found on page 13, regarding the deal:..Read more>>