Apple may be getting a secret slice of Google Chrome search earnings
A UK regulator appears to have discovered, but then redacted, that Google has been paying Apple search revenues generated through Chrome in order to discourage it from launching a rival system.
Google Chrome icon
Apple has regularly been rumored to be working on its own search engine to rival Google. It appears it could be in the company's interest to not do so.
According to The Register, Google has been paying Apple a portion of the revenues it gets from people searching via the Google Chrome iOS app. This is over and above the officially acknowledged search revenues that Google pays, and it's reportedly what has concerned the UK's Competition and Markets Authority (CMA).
The CMA has not stated this, and The Register's report is based on UK regulator documents released in June 2021. Those documents featured redacted information, and the presumption that the publication has made, is that what has been removed are references to Chrome on iOS.
"Apple receives a significant share of revenue from Google Search traffic on Safari and [x] on iOS devices," says one paragraph in the CMA report.
It's not clear why the UK regulator would not disclose what it has presumably uncovered during its investigation, but there are three sections where it does so. They include one about why this is all a concern for the CMA.
"Given this revenue share, when [x] or Safari is successful in competing for an iOS user, rather than winning a full share of the search traffic revenue it only wins a partial share (ie the revenue to which it was not previously entitled)," says the CMA. "These revenue sharing arrangements therefore dampen incentives for competition between browsers on iOS."
Whatever the revenue sharing actually comes from, the CMA argues that the money means Apple has greater incentive to keep to the current situation instead of creating a rival.
There is no detail concerning how much Google may be paying Apple because of Google Chrome. However, it has previously been reported that the publicly-known deal about being the default search engine on iPhones is likely to mean Google pays Apple as much as $15 billion annually.
Neither Google nor Apple have commented.
Read on AppleInsider
Google Chrome icon
Apple has regularly been rumored to be working on its own search engine to rival Google. It appears it could be in the company's interest to not do so.
According to The Register, Google has been paying Apple a portion of the revenues it gets from people searching via the Google Chrome iOS app. This is over and above the officially acknowledged search revenues that Google pays, and it's reportedly what has concerned the UK's Competition and Markets Authority (CMA).
The CMA has not stated this, and The Register's report is based on UK regulator documents released in June 2021. Those documents featured redacted information, and the presumption that the publication has made, is that what has been removed are references to Chrome on iOS.
"Apple receives a significant share of revenue from Google Search traffic on Safari and [x] on iOS devices," says one paragraph in the CMA report.
It's not clear why the UK regulator would not disclose what it has presumably uncovered during its investigation, but there are three sections where it does so. They include one about why this is all a concern for the CMA.
"Given this revenue share, when [x] or Safari is successful in competing for an iOS user, rather than winning a full share of the search traffic revenue it only wins a partial share (ie the revenue to which it was not previously entitled)," says the CMA. "These revenue sharing arrangements therefore dampen incentives for competition between browsers on iOS."
Whatever the revenue sharing actually comes from, the CMA argues that the money means Apple has greater incentive to keep to the current situation instead of creating a rival.
There is no detail concerning how much Google may be paying Apple because of Google Chrome. However, it has previously been reported that the publicly-known deal about being the default search engine on iPhones is likely to mean Google pays Apple as much as $15 billion annually.
Neither Google nor Apple have commented.
Read on AppleInsider
Comments
Paying protection to avoid the iPhone-juggernaut... the Sherman Act just called and so did EU.
They have this right, for most any reason they wish. I think there was a time decades ago ATI pissed off Steve Jobs for publicly talking about some arrangement with Apple while the were embargoed, pre-keynote. I don't think Apple after that.
On my MacBook, all of Google is blocked unless a site demands it. In those cases, I enable it on a temporary basis thanks to Little Snitch.
If you can avoid Google (and Amazon) then do so. The world will be a better place without them.
Finding something with clear enough wording though is probably impossible so I can't see this going anywhere.
Now, if Google threatened to harm/degrade/impair performance to iOS users unless Apple took the deal, there might be some merit. But I deeply doubt that is the case.
Two private companies is one thing. Two 'gatekeepers' is another.
Then again, it does look like the UK thinks it had something. Enough? I doubt it.
Apple and Google only got to where they are now because of first mover status.
They were not always gatekeepers. That is a result of many factors and why they fell under the EU radar for so long.
There is a point when your size and influence puts you on the radar and when the complaints start coming in (as they have for the last few years) investigations begin.
How can you force any company to compete? That is not the issue.
The issue would be if companies collude to not compete (as many already have) and in doing so, distort markets and negatively impact consumers.
Then the investigations begin and some very hefty fines get issued.
I know because I've done work for a major EU company which got fined millions of euros for simply attending a meeting.
They were invited and went. The invitation was from a US company to various industry heavyweights.
Once at the meeting the subject of price fixing was raised and things went downhill from there. The US company got cold feet and formally notified the EU.
Competition law allows those who denounce anti competitive practices protection against prosecution. It's a weird situation to be in and in this case was compounded by an extremely poor job by legal assessors who were contracted specifically for the task.
The upshot was that everyone at the meeting got fined and the company behind the idea got off the hook.
In this case, and given the resources of both companies, if anything untoward has gone on will probably be extremely hard to nail down.
That said, even Google's current deal with Apple might end up under the microscope at some point.
Microsoft didn't make the hardware and yet still forced OEM's into a corner and pushed any possible competition out the door. That is the definition of being anti-competitive.
Apple makes and sells hardware directly to end users. There has NEVER been an issue of OEMs offering distinct features and free software and services to users to incentivize purchasing their devices over another's. All hardware vendors do this. This is the very definition of competing in a market. It is even more the case because Apple only really competes at the high end of any respective market.
A case be made against Google forcing OEMs to offer their services over an alternative.
Also in any "localized" market where Apple may have a majority position, the same case might be possible, if any malicious intent is discovered, i.e. Apple is purposefully doing something keep competition out, rather than just offering their end users convenience. However, Apple could also prove that they had to enter a specific market because 3rd party offerings were second class to other platforms (hence, iTunes+iPod, Safari, Apple Maps, etc.).