Apple caught up in UK’s Google platform probe

From Reuters’ “UK regulators take aim at Apple’s search engine deal with Google” posted Wednesday:

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.

Apple received the “substantial majority” of the 1.2 billion pounds ($1.5 billion) that Google paid to be the default search engine on a variety of devices in the United Kingdom in 2019, according to the report.

The U.K. Competition and Markets Authority, in its final report investigating online platforms and digital advertising, said the arrangements between Apple and Google create “a significant barrier to entry and expansion” for Google’s rivals in the search engine market. Those rivals include Microsoft Corp’s Bing, Verizon Communications Inc-owned Yahoo and independent search engine DuckDuckGo, all of which also make payments to Apple in exchange for being search engine options on its devices, the report said.

My take: Not clear to me where Apple had done wrong.

13 Comments

  1. David Emery said:
    About the only change Apple could make is to provide -no default-, which would require yet another action on the part of the (possibly unsophisticated) user to select which search engine to use. But there is competition in search engines, facilitated by the relative ease to change the default search engine setting.

    (I’ve been using DuckDuckGo for years, and am mostly happy with it. Maybe once a quarter I’ll go to google because I didn’t like the DDG results.)

    2
    July 2, 2020
  2. Horace Dediu said:
    I suppose there is no “significant barrier to entry and expansion” for Google’s rivals in the search engine market for Android phones which make up the majority of phones in use in the UK.

    11
    July 2, 2020
    • Jonny Tilney said:
      What is it with competition authorities? Are they in a kind of competition to see who can make the most outrageous claims?

      1
      July 2, 2020
  3. Fred Stein said:
    My guess? Apple gets 80% of Google’s payments to be the default search in the UK because:
    1) Google would be the default for Android. $0
    2) Bing would be the default for Windows. $0
    3) Google customers buy ads. They want Apple customers who are in minority but spend more.

    4
    July 2, 2020
  4. Steven Philips said:
    Philip, “My take: not clear to me where Apple had done wrong.”
    They sold products in Europe?

    Horace: Quit being logical!

    1
    July 2, 2020
  5. Jerry Doyle said:
    “…. or restricting Apple’s ability to monetize default positions.”

    The above comment by the UK regulators saying enforcement authorities should be given a “range of options” including restricting Apple’s ability to monetize default positions puzzles me. Perhaps it’s my naïveté in understanding the nuances of antitrust issues. How is all this different when the powerful sports leagues, including the Olympics, maximizes their respective “squeeze” on broadcast networks to ante-up if you want the privilege of broadcasting our games?

    Apple has a platform of 1B plus premium consumers with discretionary incomes and it seems logical for Apple to provide a path for the company willing to pay to be a default search engine all while maximizing the consumer discretion with a couple of taps reversing the default to another search engine. If the consumer does not have the technological savvy or judgment to go into Settings, tap on Safari, go to Search Engine to change the default to another Search Engine, then what is the consumer doing owning the device? Can that consumer even pull down his/her/they email to read?

    2
    July 2, 2020
    • David Emery said:
      It would be interesting to read a legal rationale for that “restricting monetizing” strategy. In the EU, that might fly, given Eurocrats’ ability to make up new laws. But the UK, of course, has a strong basis in common law, and the arguments on that in a UK court would be very interesting to read. IANA(UK)L, so I can’t really say if there is a legitimate basis for such a finding.

      By the way, unlike Apps in the App Store, Apple has no stake in the internet search business. So an argument for ‘unfair competition’ can’t include Apple as a competitor.

      0
      July 2, 2020
  6. John Blackburn said:
    My first reaction was “Apple should be free to choose who they like as the default search engine”, but the objections make a fair point that Apple and Google effectively shut out alternatives, given the low likelihood that most people would ever switch from the default.

    I would support all browsers being required to support this approach:
    • agree on a shared list of search engines vetted (performant, scalable, etc) by the browser consortium
    • randomly choose from the list for each new user, persisting that choice for subsequent use
    • provide a clear and easy affordance to change search engine at will

    0
    July 2, 2020
    • David Emery said:
      ONLY if this is the requirement for all platforms, including Android and Windows.

      3
      July 2, 2020
  7. Aaron Belich said:
    And yet DDG’s annual growth appears to be anywhere from 75-200% going back to their inception:

    https://duckduckgo.com/traffic

    Yes, such limitations… clearly a large barrier to entry…

    ‘What a maroon!’

    0
    July 2, 2020
  8. Bart Yee said:
    Well, its like this. When you set up a new iPhone, you are given a choice of which search engine you wish to use in the provided Safari phone browser. The user is given the choice of Google, Yahoo, Bing, DuckDuckGo, listed in that order on iOS 12 (and I suspect iOS 13) as well. I suspect Google is likely checked off as default currently, partly because it is also listed first (he who pays the most goes first – sort of like airline boarding).

    The EU could stipulate that despite Google paying to be first on the list and default, Apple could be “forced” to alphabetize the list, and not have ANY search engine be default. I suppose Yahoo will always complain that it would end up last in those situations. Maybe randomize the list every time it is opened?

    Apple does not stop people from going to any other search engine website to use search. Apple does not stop people from downloading other browser apps, of which there are a fair number of and of course each wishes to monetize its user.

    0
    July 3, 2020
  9. David Drinkwater said:
    I don’t see the kerfuffle, either:

    Google pays Apple to be *default* browser. Apple takes Google’s money.

    Nothing stops a user from picking a different browser.

    Somewhere in the world, there are statistics on what search engines are used to do search. I’ll bet Apple user’s are not leading the pack as the highest percentage by user as the most consistently Google search users (in fact, I’d bet on the contrary: Android mouth-breathers will win that honor hands-down).

    Add to all of this that Goggle surely dominates search world-wide, … I am sure this is nothing more than a spurious claim by a court that sees no other ways to harm either Google OR Apple than by making said claim.

    How often have you heard someone say “Google it!”

    Not so much with “Bing it!”, “Yahoo it!” (Yahoo failed here quite miserably on its own), or “DDG it!”

    It’s a stupid claim. Apple has every right to take Google’s money.

    0
    July 3, 2020

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