A long-term deal between Apple and Google has been scrutinized by UK regulators at a cost of $1.5 billion to become the default search engine for Safari users in the UK,media reported. Clearly, the “strong and strong” agreement has created a major obstacle to Google’s competitors entering the market and expanding their business. To that end, regulators have proposed limiting Apple’s profits from such deals, or allowing users to choose their preferred default search engine when setting up devices.
Infographic (from How-To-Geek)
For years, the mobile Safari browser has used Google as its default search engine. Not only does this make the iPhone a significant source of revenue for Google’s mobile advertising business, but it also gives it a bigger advantage over its competitors.
A court filing in 2014 showed that Google paid Apple $1 billion to ensure it continued to serve as the default search engine for Safari, a mobile browser in the U.S. Analysts estimate that the numbers will increase in the coming years.
Apple is clearly happy to accept that, although no specific figures have been publicly disclosed, there is speculation that the company could easily generate about $9 billion in revenue a year.
Regulators, however, worry that such a huge deal will stifle competition in the UK mobile search market, which last year was a 50 per cent premium to the US market, which has a much larger population base.
In the face of Google’s money offensive, rivals such as Microsoft’s Bing and DuckDuckGo clearly won’t get the “golden ad bit” on the iPhone browser.
In recent years, EUROPEAN Union and US regulators have become increasingly focused on big technology companies, fearing that the size and power of Silicon Valley giants will allow them to ignore antitrust principles. At the practical level, however, fines are higher in the EU.