The U.K. Competition and Markets Authority has recently revealed that payments by Google to Apple Inc. to become the default search engine on the tech firm’s Safari web browser creates a barrier to entry and expansion for the search engine giant’s rivals. In 2019, Google had paid $1.5 billion to Apple to become the default search engine on its devices across the U.K.

The U.K. Competition and Markets Authority from its final report inspecting digital advertising and online platforms stated that the deal between Google and Apple act as a barrier for search engine companies to enter the industry.

Some of these competitors include Verizon owned Yahoo, Microsoft’s Bing, and DuckDuckGo, an independent search engine. All these companies offer substantial amounts of funding to Apple for being the search engines on its devices.

Owing to the impact on preinstallations and default search engines on Apple’s mobile and other subsequent devices, it is the regulation’s view that the tech giant’s current deal with Google are a crucial barrier for other competitors. However, Google and Apple did not comment on the situation.

Toni Sacconaghi, Bernstein analyst, previously this year projected that Apple generates approximately $9 billion every year across the world through licensing arrangements, income with gross margins of more than 90 percent, and approximately 80 percent of the overall revenue coming from Google.

While in a report, the authority stated that enforcement agencies should be provided with a series of options to tackle the Google-Apple arrangement. The options include needing choice screens through which users get to decide which search engine to mark as default during device setup or limiting Apple’s capability to monetize default positions. While speaking on this ideology, Apple stated that the monetization limitations will be highly costly.

Source Credit: https://www.channelnewsasia.com/news/business/uk-regulators-take-aim-at-apple-s-search-engine-deal-with-google-12893164