What you need to know
- UK regulators have questioned Google's payments to Apple.
- It gave Apple $1.5 billion in 2019 to be the default search engine on UK devices.
- Regulators say this creates a "significant" barrier to the competition.
UK market regulators have questioned Google's payments made to Apple so it could be the default search engine on devices in the UK, stating they create a significant barrier to competition.
The payments by Alphabet Inc's Google to Apple Inc to be the default search engine on Apple's Safari web browser create "a significant barrier to entry and expansion" for Google's rivals in the search engine market, the UK markets regulator said in a report released on Wednesday.
According to the report, Apple received a "substantial majority" of the $1.5 billion Google paid to be the default search engine on devices in the UK in 2019. The UK Competition and Markets Authority has released a report which says that this arrangement creates "a significant barrier to entry and expansion" for search engine rivals like Yahoo and DuckDuckGo.
The report states:
Given the impact of preinstallations and defaults on mobile devices and Apple's significant market share, it is our view that Apple's existing arrangements with Google create a significant barrier to entry and expansion for rivals affecting competition between search engines on mobiles
Globally, it is estimated that Apple pulls about $9 billion a year from such arrangements, 80% of which comes from Google. The report states that enforcement authorities should be given a range of options to rectify the arrangement, including choice screens where users can decide which search engine they want to use during device setup. Apple reportedly told the report that monetization restrictions would be "very costly."
With the release of iSO 14, Apple will give users the options to at least change their default browser and email apps, no mention was made of other services like search engines or music playback.