Google Pays Apple Approximately $1.5 Billion In The UK Alone To Remain Safari’s Default Search

According to a report from Reuters, the United Kingdom regulators are scrutinizing a longstanding deal between two tech giants- Apple and Google over the default search engine in the Safari browser.

The UK government’s Competition and Markets Authority compiled an updated report, which highlights that Google paid Apple a hefty $1.5 billion (or £1.2 billion) in 2019. Google pays Apple each year in the United Kingdom alone to remain the default search engine in Safari. According to the report, this deal creates a major barrier to entry and expansion for rival search engines to Google.

The report also suggests either limiting the ability of Apple to monetize these types of deals or to provide people a choice of search engine upon setup. Such deals indicate the value that Google places on these default positions. The Safari browser has relied on Google for many years, making Apple’s iPhone a significant revenue-generator for Google’s smartphone ad business. It has also been providing Google with a competitive edge over its competition.

Court documents revealed back in the year 2014 that Google paid Apple $1 billion to secure its default position on the mobile Safari browser in the United States, and analysts suggest that the amount would have been increased in the years since. Although Apple has never revealed the revenue it generates from such deals, it is estimated that the company earns nearly $9 billion every year from these types of placement deals.

Regulators are now concerned over the massive United Kingdom deal. Rival search engines to Google such as Microsoft-owned Bing and DuckDuckGo may not be in a position to pay such large payments to become the default search engine in the iPhone Safari browser. People primarily access the internet via smartphones, which account for more than two-thirds of general searches being performed by the consumers.

Regulators in both the European Union as well as the United States are looking at Big Tech over concerns that the power and size Silicon Valley companies make them anti-competitive. However, the European Union seems to be far aggressive in terms of enforcing such rules and imposing fines on tech giants. During the last ten years, the European Union has handed Google several multibillion-dollar fines. Moreover, the regulators are now looking into Apple over the company’s management of the Apple App Store, and the fee the company charge app developers.

Photo: Raymond Boyd via Getty Images

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